💰FINANCIAL GAMES💰

Learn finance through play!

Emergency Fund

Build a financial safety net to protect yourself from unexpected expenses

WHAT IS AN EMERGENCY FUND?

An emergency fund is money set aside to cover unexpected expenses or financial emergencies. It's your financial safety net that prevents you from going into debt when life throws you a curveball.

Unlike other savings goals (vacation, house down payment), an emergency fund is specifically for true emergencies - unexpected, urgent, and necessary expenses that you can't avoid.

🛡️ Protection

Prevents debt when unexpected expenses arise

😌 Peace of Mind

Reduces financial stress and anxiety

💪 Financial Independence

Gives you options and freedom in difficult situations

EMERGENCY FUND CALCULATOR

$
$
$
Target Amount
$18,000
Still Need
$18,000
Months to Goal
36 months
Progress: 0.0%$0 / $18,000

HOW MUCH SHOULD YOU SAVE?

3 Months

$9,000

Minimum - Good for stable income, dual earners

Good for:
  • Stable employment
  • Dual-income households
  • Good insurance coverage

6 Months

$18,000

Recommended - Standard for most people

Good for:
  • Most people (recommended)
  • Single income households
  • Moderate job security

9 Months

$27,000

Conservative - For single income, variable income

Good for:
  • Variable income
  • Self-employed
  • Higher risk industries

12 Months

$36,000

Maximum - For self-employed, high uncertainty

Good for:
  • Very uncertain income
  • High expenses
  • Maximum security

COMMON EMERGENCIES

Job Loss

Unexpected unemployment can last months while you search for a new position

Typical Cost: 3-6 months of expenses
Impact: High - Can happen to anyone, regardless of industry

Medical Emergency

Unexpected health issues, accidents, or medical bills not covered by insurance

Typical Cost: $1,000 - $10,000+
Impact: High - Medical debt is a leading cause of bankruptcy

Car Breakdown

Major car repairs or need to replace a vehicle unexpectedly

Typical Cost: $500 - $5,000+
Impact: Medium - Can affect ability to get to work

Home Repairs

Roof leak, HVAC failure, plumbing emergency, or appliance replacement

Typical Cost: $500 - $10,000+
Impact: Medium - Can cause additional damage if not fixed quickly

Family Emergency

Need to travel for family crisis, funeral, or support loved ones

Typical Cost: $500 - $3,000+
Impact: Medium - Emotional and financial stress

Legal Issues

Unexpected legal fees, court costs, or settlement expenses

Typical Cost: $1,000 - $20,000+
Impact: Low-Medium - Less common but can be very expensive

WHERE TO KEEP YOUR EMERGENCY FUND

✅ High-Yield Savings Account

Pros:
  • FDIC insured (up to $250k)
  • Easy access when needed
  • Earns interest (2-5% APY)
  • Separate from checking account
Cons:
  • Lower returns than investments
  • May have withdrawal limits

Best Choice: Most people should use a high-yield savings account

Money Market Account

Pros:
  • FDIC insured
  • Check-writing ability
  • Higher interest than regular savings
Cons:
  • May require minimum balance
  • Limited transactions per month

❌ Regular Checking Account

Pros:
  • Immediate access
  • No limits on transactions
Cons:
  • Very low or no interest
  • Too easy to spend
  • Not separated from daily spending

Not Recommended: Too tempting to spend

❌ Investments (Stocks, Crypto)

Pros:
  • Potential for higher returns
Cons:
  • Value can drop when you need it
  • May take time to sell
  • Tax implications
  • Defeats the purpose of safety

Not Recommended: Too risky for emergency funds

HOW TO BUILD YOUR EMERGENCY FUND

1

Start Small

Begin with a goal of $1,000 or one month of expenses. This gives you a quick win and covers most small emergencies. Don't wait until you can save the full amount.

2

Automate Savings

Set up automatic transfers from checking to savings on payday. Pay yourself first before you have a chance to spend the money. Even $50-100 per month adds up.

3

Use Windfalls

Put tax refunds, bonuses, gifts, or side hustle income directly into your emergency fund. This accelerates your progress without affecting your regular budget.

4

Cut Expenses Temporarily

Temporarily reduce non-essential spending (dining out, subscriptions, entertainment) and redirect that money to your emergency fund. Once funded, you can resume normal spending.

5

Keep It Separate

Use a separate savings account at a different bank if needed. Out of sight, out of mind. This prevents you from "borrowing" from your emergency fund for non-emergencies.

6

Replenish After Use

If you use your emergency fund, make rebuilding it a priority. Adjust your budget to restore it as quickly as possible. Your emergency fund should always be ready.

WHAT COUNTS AS AN EMERGENCY?

✅ TRUE EMERGENCIES

Job Loss - Unexpected unemployment
Medical Emergency - Unexpected health expenses
Car Breakdown - Needed for work/essential travel
Home Repairs - Urgent repairs (roof leak, broken HVAC)
Family Emergency - Travel for crisis or funeral
Legal Emergency - Unexpected legal fees

❌ NOT EMERGENCIES

Vacation - Plan and save separately
Holiday Shopping - Budget for this annually
Sale Items - Not urgent, can wait
Entertainment - Concerts, events, etc.
Home Upgrades - Wants, not needs
Investment Opportunities - Use investment funds, not emergency fund