Emergency fund basics
What is an emergency fund?
Cash set aside only for real surprises: a job loss, a medical bill, an urgent car or home repair. It keeps one bad month from turning into credit card debt.
How much should I have in an emergency fund?
A common guideline is three to six months of essential expenses. Lean toward six or more if your income is irregular, you're the only earner, or you have dependants.
Which expenses should I count?
Only the essentials you'd still pay if your income stopped: housing, utilities, groceries, insurance, transport, minimum debt payments and childcare. Leave out dining out and other extras.
Where should I keep my emergency fund?
Somewhere safe, separate and easy to reach, such as a high-yield savings account. Avoid investing it in stocks, because its value could drop right when you need it.
Should I pay off debt or build an emergency fund first?
Many people save a small starter fund first, often $1,000 or one month of expenses, then focus on high-interest debt, then finish the full fund.
Educational content only — not individualized financial, investment, tax or legal advice.