This is a common question and an important one.
The answer will depend on numerous factors:
- your current income level,
- individuals dependent on you,
- existing debt, and other such factors.
But there are some simplified thumb rules that you can follow.
A person who has just started earning and has minimal responsibilities can build a contingency fund that is equal to their income of at least three-six months.
However, if you are living with a family including children and dependent parents then an emergency fund equal to 12 months.
This calculation can get more refined, however these are good thumb rules to follow.