Definition
Funds set aside for unexpected expenses or emergencies, serving as a financial safety net.
What to consider
- Build a fund specifically for unexpected expenses.
- Keep it easily accessible so you can tap into it quickly.
- Review and increase your target as your financial needs grow.
Real world scenarios
- After her car broke down unexpectedly, Emma was relieved that her emergency savings covered the repair costs without derailing her budget.
Related terms
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