The basic purpose of an emergency fund as the name implies is to be available for use during unforeseen circumstances to avoid going into debt. All debt is not necessarily bad.

Falling into unplanned debt usually means borrowing money at the last minute out of desperation which results in unfavorable lending terms.

Job loss is the only reason you should consider using your emergency fund to pay your bills; while you are searching another job.

When to establish an emergency fund?

Start your emergency fund as soon as you have any income and before you even begin paying off any debt.

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The size of your emergency fund depends on your job security. Your job provides a monthly cash flow.

How much emergency fund is needed?

How to get highest safe return on your emergency fund?

The best of both worlds would be to have a way to park your emergency fund in a FDIC insured account and at the same time earn 8+% returns.

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