An emergency fund provides financial security during unexpected situations such as medical emergencies, job loss, or car repairs. Ideally, an emergency fund should cover three to six months of living expenses. Keeping emergency funds in a separate high-yield savings account ensures accessibility without temptation to spend. Automating savings, cutting non-essential expenses, and gradually increasing contributions help build a robust emergency fund. Having an emergency fund reduces reliance on credit cards or loans during crises and prevents financial setbacks.
Emergency Funds: Why You Need One
