Emergency fund
Money set aside for emergencies, usually 3 to 6 months of expenses, kept easy to reach.
An emergency fund is money you keep aside for a sudden need, like a job loss, a medical bill, or an urgent repair. A common target is 3 to 6 months of expenses, kept somewhere safe and easy to reach, such as a savings account or a liquid fund, not locked away or invested in risky assets.
Questions people ask
How much should an emergency fund be?
A common target is 3 to 6 months of expenses, kept somewhere safe and easy to reach, like a savings account or liquid fund, not locked away or in risky assets.
Why build an emergency fund first?
So a sudden cost, like a job loss or medical bill, does not force you to break a long-term investment or borrow at high interest.
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