An emergency fund is money set aside for surprises: a job loss, a car repair, or a medical bill. Having one means you won't have to sell investments at a bad time or lean on high-interest debt. Most guidance suggests building at least a starter fund before investing heavily.
Emergency Fund
Cash for the unexpected — before you invest the rest.
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How much to save
A common target is three to six months of essential expenses. If your income is variable, or one earner supports the household, lean toward the higher end. Start with a smaller milestone — say one month — and build from there.
Where to keep it
Keep it somewhere safe and accessible, like a high-yield savings account — not invested in stocks, where it could fall right when you need it. The goal is stability and liquidity, not growth.
Educational information only — not investment advice, and not a recommendation to buy any security. Expense ratios are approximate and can change; verify with the fund issuer. We are not a licensed financial advisor.
Frequently asked questions
Should I invest or build an emergency fund first?
Generally, secure a starter emergency fund (and capture any 401(k) match) before investing heavily. This is educational information, not advice.
Where should I keep my emergency fund?
A high-yield savings account is common — safe, liquid, and it earns some interest.
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