An emergency fund is a money saved to cover any financial emergencies or unexpected expenses that may arise. Unexpected car repairs, medical bills, unemployment or other income loss, property damage, or family emergencies are examples of unplanned expenses.

An emergency fund is a financial safety net set aside for unexpected expenses or emergencies, such as medical bills, car repairs, or sudden job loss. The purpose of this fund is to provide quick access to cash without the need to take on debt or disrupt long-term investments.

Financial experts typically recommend saving three to six months' worth of living expenses in an emergency fund, though this can vary based on individual circumstances. It should be kept in an easily accessible, low-risk account like a savings account or money market fund. Having an emergency fund offers peace of mind, financial security, and the ability to handle life’s unforeseen events without jeopardizing one's financial health.