Emergencies happen: illness, job loss, a broken car. An emergency fund stops you from borrowing at high cost.
How much?
Aim for three to six months of essential expenses. Start with a smaller first target.
Where to keep it
- A savings account you can access quickly
- A money market unit trust
- Not in investments that can fall in value or are hard to sell
Build it fast
- Automate savings on payday
- Save windfalls and bonuses
- Cut one expense and redirect it
Use it only for real emergencies
Refill it after use.
This is general information, not financial advice. Compare products and speak to a licensed adviser.
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