Emergency savings

Emergency savings are funds set aside specifically to cover unexpected expenses or financial setbacks, such as medical emergencies, car repairs, or job loss. Having this reserve provides financial security and peace of mind, allowing you to handle unforeseen events without relying on debt or disrupting your regular finances. Experts typically recommend saving enough to cover three to six months’ worth of essential living expenses, ensuring you’re prepared for sudden financial challenges. Building an emergency fund gradually helps establish stability and reduces stress during difficult times.