# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Emergency Fund

What is an Emergency Fund?

An emergency fund is available cash set aside for financial emergencies, such as unemployment or a large medical bill. These unlucky circumstances can happen to anyone, so everyone should have an emergency fund.

The general rule of thumb is to save three to six months’ worth of essential living expenses. However, if you have a job that’s hard to replace (for instance, if you are highly paid or in a highly specialized field) you might want to keep nine to 12 months’ worth of living expenses on hand.

It's best to keep your emergency fund in cash or other low-risk assets that can be easily accessed, such as a high-yield savings account, checking account, or money-market account.

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