Budgeting and saving
Emergency fund: how much you need and where to keep it
How to work out your amount, where to start if there is nothing to save, and where to keep the money so it is there when you need it.
Emergency fund: what it means
An emergency fund is a cash reserve covering 3-6 months of expenses in case you lose income or face unexpected costs.
An emergency fund is money set aside from everyday spending in case your income stops or you suddenly need to pay for treatment, repairs or a move. The usual advice is to hold enough to cover 3-6 months of essential expenses.
The fund should be easy to reach: a separate interest-bearing account, a deposit with early withdrawal, part in foreign currency. Do not put this money into risky investments: you need it precisely when markets may be down.
You can start small, for example with one month's budget, and add to the fund every month.
In detail, with examples: Emergency fund: how much you need and where to keep it
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