Emergency Funds:

An emergency fund is spare cash that is used during personal financial distress. Events such as the loss of a job, an illness, or a recession are examples of when many individuals would need to use their emergency fund to continue to survive. Thus, the primary purpose of the fund is to meet emergency expenses during unforeseen circumstances. By doing so, it reduces the need to borrow debt at high interest rates or to utilize one's retirement funds. Ideally, the emergency funds should be 3-6 months of expense and growing of emergency fund should be the utmost priority. These stash of money helps in covering the financial surprises which can be costly and stressful. It is an essential corpus that must keep aside to tackle emergencies.

Importance of emergency fund:

How much Emergency Fund is required?
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