Personal Finance

Q&A: What is an emergency fund?

An emergency fund is money set aside (usually in cash, a checking account, or a savings account) for unexpected expenses. It is usually recommended to have anywhere from 3 to 12 months of expenses in this fund, depending on various factors such as job/income security, risk tolerance, and volatility of investments.

Pro Tip: I tend to recommend having a bigger emergency fund so someone can invest without having to worry about selling when their investments are down. See What I Believe to be the Best Investment Strategy.

Leave A Comment