What an emergency fund is
Emergency savings protect essential life from an unexpected, necessary cost or a temporary loss of income.
What it is not
Known annual bills, planned travel and predictable repairs belong in separate sinking funds when possible.
Start with a reachable cushion
A small first target can prevent a minor surprise from becoming new debt. Increase it gradually toward several months of essential costs according to your circumstances.
- Define eligible emergencies
- Choose a first target
- Keep it accessible
- Contribute consistently
Use and rebuild without guilt
The fund exists to be used for genuine emergencies. Afterward, add rebuilding it to the budget again.