What is an emergency fund?
Explain it like I'm 16
An emergency fund is money kept available for unexpected essential costs or an interruption to income. It provides a buffer when a plan goes wrong.
A real-world example
An unexpected £180 essential repair arrives. A £250 buffer could cover it with £70 left, reducing the need to find the whole amount immediately. These are example figures, not a savings target.
Example 1 of 1
Common misunderstanding
An emergency fund is different from money already allocated to a predictable annual bill or a planned holiday.
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