Life is unpredictable, and unexpected expenses can throw even the most careful budget off track. That’s where an emergency fund comes in. This is money set aside specifically for unplanned costs, such as car repairs, medical bills, or sudden job loss. Without this safety net, people often have to rely on credit cards or loans, which can quickly lead to debt.

Financial experts typically recommend saving three to six months’ worth of living expenses in an emergency fund. That may sound intimidating, but you don’t need to build it overnight. Start small—set aside even $20 or $50 a month. Over time, those deposits grow, and you’ll be better prepared when life throws you a curveball.

Keeping your emergency fund in a separate, easily accessible savings account is a smart idea. That way, you won’t be tempted to dip into it for everyday expenses, but you’ll still be able to access it quickly if needed.

An emergency fund gives you more than just financial protection—it gives you peace of mind. Knowing you have a cushion makes it easier to handle life’s surprises without panic, stress, or debt.