Cash reserved for genuine surprises — job loss, medical bills, urgent repairs.
The standard target is 3–6 months of essential expenses in a high-yield savings account. It is insurance, not an investment; its job is existing, not earning.
Example: $3,800/month essentials × 6 = $22,800 target.
FAQ
What is Emergency Fund in simple terms?
The standard target is 3–6 months of essential expenses in a high-yield savings account. It is insurance, not an investment; its job is existing, not earning.