To begin with, an emergency fund as the name suggests, is a financial safety net that is normally set aside for emergencies/ unexpected expenses. Before setting up an emergency fund, you can calculate your monthly expenses for at least 3 months and make that your target for the emergency fund. BudgetHaving a budget is the best way to track how much you can set aside to go towards your emergency fund. If there is a change in your financial situation, reevaluate your emergency fund to cater for the changes. You can tap into your emergency fund for items such as living expenses after a job loss or after a reduction in your income, emergency home repairs, emergency / necessary medical expenses etc.

Source: Standard Digital September 25, 2020 06:56 UTC