Personal Finance
Emergency Fund
Definition
What is Emergency Fund?
Liquid savings reserved for unexpected expenses or income disruption.
Example in practice
How This Looks in Practice
Six months of essential expenses are kept in an accessible money market fundA mutual fund that invests mainly in short-term, relatively liquid instruments such as treasury bills and deposits..
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Related Terms
Personal Finance
Savings
Money set aside rather than spent, often for emergencies or future goals.
Personal FinanceNet Worth
Total assets minus total liabilities.
Personal FinanceSavings Rate
The percentage of income saved or invested during a period.
Retirement InvestingWithdrawal Rate
Annual portfolio withdrawals divided by the portfolio's starting or current value.