Everything You Need To Know About Emergency Funds [Infographic]

An emergency fund is money you set aside to deal with large, unexpected expenses.

An emergency fund creates a financial buffer against events like a car repair, home repair, illness, or job loss.

You should aim for three to six months of expenses in an emergency fund. However, this can vary based on factors like your family, job, health, and location. Take the How Much Should You Save In Your Emergency Fund Quiz to find the best amount for you!

The best place to keep your emergency money is somewhere separate, liquid, and accessible–but not too accessible. Options include a high-yield savings or money market account.

Use your emergency fund effectively by being deliberate with how you spend it. Only use the money when events are unexpected, necessary, and urgent.

1. Determine your savings goal
2. Maximize your resources by trimming your budget
3. Transfer any existing savings to jumpstart the process
4. Calculate your monthly plan
5. Set up an automatic transfer to your savings
6. Boost your savings with any unexpected windfalls
7. Stay accountable by tracking your progress
8. Look for ways to stay engaged and motivated

Discover everything you need to know about emergency funds, including how to start your own in The Ultimate Guide To Emergency Funds.