An emergency fund exists for one job: covering essential expenses if income stops unexpectedly. The right size depends on your monthly essentials and how many months of coverage feels safe for your situation.
Why 3-6 months is the common range
Fewer months of coverage suits stable, dual-income households with easily replaceable jobs; more months suits single-income households, variable income (like freelancing), or harder-to-replace roles.
Where to keep it
Emergency funds are typically kept in an easily accessible account (like a high-yield savings account), not invested in the stock market — the goal is availability without risk of loss right when you need it, not maximum growth.