An emergency fund is money set aside for true surprises: job loss, medical bills, urgent repairs. It prevents debt from turning a problem into a crisis.
How much to save Start with a mini-fund of one month of essential expenses. Then build toward 3–6 months based on job stability and dependents. If your income is irregular, aim for the higher end.
Where to keep it Use a separate savings account that is easy to access but not too easy to spend. A basic bank savings account works. The priority is safety and liquidity, not chasing returns.
How to get there • Automate a fixed transfer after payday. • Save windfalls (tax refunds, bonuses) instead of upgrading lifestyle. • Reduce one recurring expense and redirect the difference.
When to use it Only for real emergencies: medical, housing, transport to work, essential utilities. Not for sales, holidays, or planned purchases.
Refill rules If you tap the fund, switch to “rebuild mode” until it’s back to target. Decide this before emergencies happen, so you avoid second-guessing when stressed.