Emergency fund


Also found in: Acronyms.

Emergency fund

A reserve of cash kept available to meet the costs of any unexpected financial emergencies.

Emergency Fund

An account where an individual deposits funds to use in an emergency. That is, if one finds himself laid off and unable to work due to a medical emergency (or, otherwise, in a financially difficult position) the emergency fund helps prevent destitution while one finds another job or recuperates. Many analysts recommend keeping three to six months of living expenses in an emergency fund, while others recommend setting aside a year's worth of expenses. See also: Rainy day fund, Equalization Reserve.

Emergency fund.

An emergency fund is designed to provide financial back-up for unexpected expenses or for a period when you aren't working and need income.

To create an emergency fund, you generally accumulate three to six months' worth of living expenses in a secure, liquid account so that the money is available if you need it.

It's a good idea to keep your emergency fund separate from other savings or investment accounts and replenish it if you withdraw. But you don't have to limit yourself to low-interest savings accounts, and might consider other liquid accounts, such as money market funds, that may pay higher interest.

If you're single or have sole responsibility for one or more dependents, you may want to consider an even bigger emergency fund, perhaps large enough to cover a year's worth of ordinary expenses.

References in periodicals archive ?
"The water, irrigation and agriculture ministries on September 10, 2016, had requested Sh33.6million emergency fund to equip Nakalale water supply with a solar plumbing system, install rising mains, distribution lines, storage facilities and water points due to insufficient funds in their budget," Ouko says.
He said under Section 110 of Public Finance Management Act, counties are allowed to establish emergency funds.The CS said the kitty acts as the first line of defence against any emergency in the counties.
Here are a few guidelines for setting up a budget: spend at or below 30 percent on housing (including mortgage/rent, utilities, and maintenance), 11-12 percent on food in the home, 11-12 percent on car expenses, and about 5-10 percent on other categories such as insurance, entertainment (including eating out), clothing, other miscellaneous expenses, and, of course, saving for that emergency fund. The bottom line: spend less than 100 percent of your income (and save the rest).
To donate to the We Love Manchester Emergency Fund by Jan 31 contact emergency.fund@manchester.gov.uk
The point of an emergency fund is to cover unexpected events that could put you into long-term debt.
The P750-million EC emergency fund is under the implementation domain of the NEA, channeled through the agency's Quick Response Fund for ECs.
Consider using it to pay off debts or creating an emergency fund." To help consumers make the most out of their money, ABA has highlighted the following tips:
Life will never be devoid of emergencies and, therefore, it is wise to have an emergency fund. Don't aspire to have an emergency-free life as it is impossible, but you can have an emergency-proof life by having an emergency fund.
Even if you don't make much and think that putting money aside is an unrealistic idea, building an emergency fund is a must.
The MSP will also learn about flood response work supported by the Scottish Government's Humanitarian Emergency Fund.
To the rescue: Central Michigan's Student Emergency Fund, a financial reserve provided by private donors to help students manage unexpected emergencies such as illness, death of relatives, eviction or medical bills.
Most advisers reckon that people should have an emergency fund that equates to three months' income, although some would increase this to six months.

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