A financial plan is a written document that spells out where you are in your financial life, where you want to be, and the investment strategies you will implement to reach your goals. A substantial financial plan should include an emergency fund.
What is an emergency fund?
An emergency fund is money that is set aside to be used in the case of an emergency, such as the loss of a job, an illness, or the death of a spouse.
Why have emergency funds?
An emergency fund increases financial security by constructing a safety net of funds that can be used to meet emergency expenses as well as reduce the need to use high interest debt.
How much should I be saving?
It is suggested that you save enough money to cover 3 to 6 months of expenses in a liquid account.