Emergency Fund vs Debt Payoff Calculator
This page runs two scenarios from one set of inputs: the full monthly budget directed to debts, and the same budget split between an emergency fund and the debts. Both result sets are shown side by side; the page makes no recommendation between them.
Open the full Debt Payoff Planner for the snowball, avalanche, and hybrid comparison.
This link contains the numbers you entered. Only people you send it to can see them. Nothing is uploaded anywhere.
Disclaimer
Not financial advice. This calculator is for educational purposes only and is not financial advice, tax advice, or a recommendation. Consider speaking with a qualified professional about your situation.
Assumptions. Interest is calculated monthly as balance × APR ÷ 12 and applied before each payment (monthly compounding). If you leave a minimum payment blank, it is estimated as the largest of: 2% of the balance, one month's interest + 1% of the balance, or $25 — actual minimums vary by lender. Simulations stop at 600 months. Displayed amounts are rounded to the nearest cent.
Data sources. Formulas: standard amortization math. No external data feeds. Page last updated: 2026-10-18.
How the math works
This page simulates two scenarios from the same inputs and presents both result sets. Scenario A directs the entire monthly budget P to the debts and contributes $0 to the fund. Scenario B contributes the entered monthly fund amount F to the fund and directs the remainder, P − F, to the debts. Debts, APRs, minimum payments, strategy, hybrid K, per-debt extras, and lump sums are identical in both scenarios; only the split of the monthly budget differs.
The debt side of each scenario follows the standard monthly waterfall: interest accrues at APR ÷ 12 on each unpaid balance and is added before payments are applied (monthly compounding); each debt receives its minimum (entered, or estimated as the largest of 2% of the balance, one month's interest plus 1% of the balance, or $25); per-debt extras are applied; then the remainder plus any lump sum goes to the current target debt and cascades down the strategy order as debts clear. The order re-sorts monthly among unpaid debts — snowball by ascending balance, avalanche by descending APR, hybrid switching at K remaining debts.
The fund side compounds monthly at the entered APY. Each simulated month, the fund balance is multiplied by (1 + APY ÷ 1200) and then the monthly contribution F is added: fundt = fundt−1 × (1 + s ÷ 1200) + F. The fund series runs in parallel with the debt simulation over the same months, so the fund balance reported for a given month reflects that month's compounding and contribution. Scenario A is the special case F = 0, where the fund stays at zero and the debt plan uses the full budget.
Four assumptions underpin every number on this page. Debt interest compounds monthly at the nominal APR divided by 12, and fund interest compounds monthly at the APY divided by 1200; loans or accounts using daily rates will differ slightly. Blank minimum payments are estimated with the rule stated above; actual lender minimums vary. The simulation stops after 600 months; balances remaining at that limit are reported as not paid off within the simulation limit. All internal math uses full floating-point precision with no per-month rounding; displayed amounts are rounded half-up to the nearest cent, and totals are summed unrounded before that final rounding.
The contribution field defaults to $0 with preset chips of $0, $100, $250, and $500, and the APY defaults to 4.00% — these are editable starting values for the arithmetic, not characterizations of any account. If the entered contribution exceeds the monthly budget (F > P), the page shows an inline validation message — "Fund contribution exceeds the monthly budget." — and runs no simulation, because that state is an arithmetic impossibility rather than a comparison of options.
Both scenarios are displayed with months to payoff, debt-free date, total interest, and total paid on the debts; Scenario B additionally shows the fund balance over time. The page presents the two sets of numbers and makes no recommendation between them. For the effect of a single one-time payment rather than a monthly split, the lump-sum impact calculator models that case; for the calendar finish date as the headline figure, see the debt-free date calculator.
Worked example
One debt: $5,000 balance, 20% APR, $125 minimum payment entered, $400 monthly budget, snowball strategy, start month November 2026. Scenario B uses a $100 monthly fund contribution at 4.00% APY.
| Scenario A ($400 to debt) | Scenario B ($100 to fund, $300 to debt) | |
|---|---|---|
| Months to payoff | 15 | 20 |
| Debt-free date | February 2028 | July 2028 |
| Total interest | $653.73 | $906.81 |
| Total paid on debts | $5,653.73 | $5,906.81 |
| Fund balance at payoff | $0.00 | $2,064.62 |
Fund detail (Scenario B): each month the fund balance is multiplied by (1 + 4.00 ÷ 1200) and $100 is added. After 12 months the fund holds $1,222.25; after 20 months — the month the debt clears — it holds $2,064.62. Month 1 debt detail (both scenarios): interest = $5,000 × 0.20 ÷ 12 = $83.33, so the balance becomes $5,083.33 before payments. A third input state, $500 monthly contribution against the $400 budget, produces no simulation — only the validation message "Fund contribution exceeds the monthly budget."
Frequently asked questions
What are the two scenarios on this page?
Scenario A sends the entire monthly budget to the debts and nothing to the fund. Scenario B sends the entered monthly fund contribution to the fund and the remainder of the budget to the debts. Both scenarios use the same debts, APRs, minimums, strategy, and extras; only the split of the budget differs.
How does the fund balance grow?
The fund compounds monthly at the entered APY: each month the balance is multiplied by (1 + APY/1200) and then the monthly contribution is added. The fund and the debts are simulated in parallel over the same months, so the fund balance shown for a given month reflects that month's compounding and contribution.
What are the default fund settings?
The monthly fund contribution defaults to $0, with preset chips for $0, $100, $250, and $500. The fund APY defaults to 4.00%. Both are starting values that can be changed; they describe the math on this page, not any account or product.
What happens if the fund contribution is larger than the budget?
The page shows an inline validation message: Fund contribution exceeds the monthly budget. No simulation runs in that state, because a contribution larger than the budget leaves a negative remainder for the debts — an arithmetic impossibility, not a comparison of options. Lowering the contribution to the budget or below restores both scenarios.
Which numbers are shown for each scenario?
Each scenario shows months to payoff, the debt-free date, total interest, and total paid on the debts. Scenario B additionally shows the fund balance over time. The two scenarios are presented side by side with their numbers; the page makes no recommendation between them.
Does the fund earn the same compounding as the debts?
Both use monthly compounding, but with different rates and directions: debts accrue interest at APR/12 on the remaining balance before payments are applied, while the fund accrues at APY/1200 on its balance before the monthly contribution is added. The rates, the formulas, and the contribution are all visible and editable.