Why an Emergency Fund Matters

An emergency fund is the cash buffer that helps you handle job loss, medical expenses, or urgent home repairs without taking high-cost loans. It prevents financial shocks from becoming long-term debt.

How much to save

A common recommendation is 3–6 months of essential expenses for most households. If you have unstable income, aim for 6–12 months.

Where to keep it

• High-yield savings account or liquid mutual fund for accessibility.
• Avoid locking emergency savings in long-term investments that are hard to withdraw.

Building the fund

Set a monthly saving target, treat it as a non-negotiable expense, and gradually increase contributions as debts reduce or income grows.