An is money set aside for life's curveballs—car repairs, medical bills, job loss. It's your financial safety net.
Why You Need One
Without an emergency fund, surprises go on credit cards. Then you're paying 20%+ on that car repair for months. The emergency fund breaks that cycle.
How Much? Build in Stages
Stage 1: $1,000 Starter Fund Covers most minor emergencies. Achievable quickly, builds momentum.
Stage 2: One Month of Expenses Your rent, food, utilities, insurance, transportation. Calculate it and save that number.
Stage 3: Full Fund (3-6 Months)
- 3 months: Stable job, low expenses
- 6 months: Self-employed, variable income, or dependents
Where to Keep It
Start Small, Stay Consistent
| Per Paycheck | Annual Savings |
|---|---|
| $25 | $650 |
| $50 | $1,300 |
| $100 | $2,600 |
What Counts as an Emergency?
| Emergency | Not an Emergency |
|---|---|
| Job loss | Vacation |
| Medical bills | New phone you want |
| Car breaks down | Black Friday sale |
| Furnace dies | Holiday gifts |