Emergency fund
Names and abbreviations on this page
CFPB — Consumer Financial Protection Bureau. United States regulator for consumer financial products.
What it means
An emergency fund is a cash reserve for unexpected expenses or an interruption in income. The amount needed depends on the household's risks, obligations and resources. Even a small reserve can help with a smaller unplanned bill.
Related skills
Define the purposeIdentify the disruptions the reserve is intended to cover.
Build graduallyChoose contributions that fit actual cash flow.
Plan accessKeep the money available when needed and review how to rebuild after use.
An everyday example
Adding $25 a week for eight weeks creates a $200 reserve, assuming no withdrawals, fees or interest. A predictable annual bill should also have a place in the regular spending plan.
What to check
Avoid a target that requires missing essential bills. Review account safety, access and fees before deciding where to keep the reserve.