What is the Role of an Emergency Fund?

[Suba]

An emergency fund is money, either in the form of bank savings or other liquid assets, that will only be used for unexpected or unforeseen needs. For singles, it's recommended to have an emergency fund of more than six times your daily expenses. So, if you spend $900 each month, your emergency fund should be at least $5,400.

Quoted from cbsnews.com, even though the unemployment rate in the US is low, a June 2025 survey found that nearly 60% of Americans don't have an emergency fund.

To motivate ourselves to build an emergency fund more quickly, we need to understand the importance of an emergency fund and its role.

 

[magnus2022]

When unemployment and financial constraints is hampering people's life and existence, you are talking of emergency fund. Emergency fund is for individuals who have been able to rise above economic downturn and challenges! A hungry man have no business with savings in any form. Emergency fund is okay but it is secondary to a man who have no stay income.

 

[eLdavis]

Emergency funds often acts as some sort of safety net financially. When expenses pops up, you can easily fall on your emergency funds to scale through them.

 

[Augusta]

The primary purpose of an emergency fund is to provide immediate access to money in the event of an unexpected financial disruption, such as medical emergencies,