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Emergency Fund: What is It and Why You Need One

Life throws us a curveball sometimes and we need to be financially prepared for the ups and downs. Unfortunately, many of us live paycheck to paycheck and cannot afford a major expense such as a medical bill, housing repair, or unexpected expense.

What is an Emergency Fund?

An emergency fund is simply money you have set aside in case you need money at a moment’s notice.

A good rule of thumb is to set aside 3 to 6 months of living expenses in your emergency fund aka rainy day fund to cover things like an unexpected job loss, medical expenses, car repairs, dental costs, or any bill that catches you by surprise.

How Long Does It Take to Build One?

How to Start an Emergency Fund (Step by Step)