How much emergency fund should I have?

Quick answer: 3–6 months of expenses. More if your job is unstable or you're self-employed.

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Full explanation

The standard recommendation is 3–6 months of essential expenses (rent, EMIs, food, utilities). Self-employed individuals and those with irregular income should aim for 6–12 months. Two-income households can get away with 3 months. Keep the emergency fund in liquid assets: savings account, liquid mutual fund, or short-duration FD. Don't invest it in equity — market downturns often coincide with job losses (when you'd need the fund most).