Savings
Emergency fund: how much to save and where to keep it
How much money you should keep in an emergency fund in Colombia, where to keep it so it doesn't lose value, and how to start with nothing saved.
An emergency fund is money set aside exclusively for real unexpected events — losing your job, a medical expense, an urgent repair — that you don't touch for anything else, not even for a good buying opportunity.
Why 3 to 6 months and not some other number
It's a general rule, not a mathematical law: it aims to cover the typical time it can take to recover from a major setback, like finding a new job. Someone with more variable income (freelance, commission-based) usually needs to lean closer to 6 months; someone with a fixed, stable income might feel covered with 3.
Where to keep it
A CDT, even though it's also low-risk, generally isn't the right place for an emergency fund: the money stays locked in until maturity, and if the emergency hits before that date, you won't be able to withdraw it as easily as from a savings account.
How to start if you have nothing saved
You don't need to reach the full 3-6 months right away. A common starting point is to set a smaller goal first (say, one month of fixed expenses) and set aside a fixed amount every time you get paid, before spending on anything else — that way saving doesn't depend on "whatever's left over" at the end of the month, which is almost never much. Having a personal budget in place helps you identify where that fixed amount can come from without touching the expenses you're already committed to.
The difference between an emergency fund and other savings
An emergency fund isn't the same as saving for a goal (a trip, a car) or investing for the long term (retirement, wealth-building). Mixing these goals into the same account is a common reason an emergency fund "disappears" the moment a purchase goal feels more urgent in the moment.
This is general financial information, not personalized financial or tax advice for your situation.
Frequently asked questions
Should my emergency fund be 3 or 6 months of my salary?
Of your fixed expenses, not your salary. If you earn a lot but spend little, the emergency fund you actually need is smaller than your full monthly salary.
Can I invest my emergency fund in stocks to earn more?
It's not recommended. An emergency fund prioritizes having the money available and not losing value suddenly right when you need it, not generating the highest possible return.
Which account should I close while I save my emergency fund?
It's not about closing accounts, but about separating the money: keeping your emergency fund in a different account or product than the one you use for daily expenses, to reduce the temptation to touch it.
How long does it take to build a full emergency fund?
It depends on how much you can set aside each month; what matters is starting with a small goal and increasing the contribution when possible, rather than waiting until you "have enough" to start.
Keep reading
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