What Is an Emergency Fund?

Sean Casterline
2 min readJun 9, 2023

It doesn’t matter how old you are or what stage of life you’re on; unexpected events can happen to anyone. From car and house repairs to workplace accidents and medical emergencies, life’s biggest surprises normally come with a financial burden. An emergency fund is a financial safety net that helps you deal with these events and thrive in the face of change. From repair bills to medical costs and living expenses, an emergency fund offers practical support and peace of mind when you need it the most.

What is an emergency fund?

Also known as a contingency fund, an emergency fund is a personal budget set aside for unexpected situations. This financial safety net covers a wide array of scenarios, from accidents and mishaps to natural disasters, domestic repairs, and loss-of-income events. In contrast to other financial planning tools, an emergency fund is set aside for unplanned expenses and financial emergencies.

What are the advantages of an emergency fund?

Regardless of your age or income, an emergency fund offers a number of advantages. First and foremost, it allows you to pay your bills, meet your responsibilities, and move forward with your life. Whether you’re talking about car repairs, medical expenses, or large and unexpected bills of any kind, being able to pay your way is worth its weight in gold.

Second, a contingency fund provides practical support so you can continue with everyday life. From buying food to paying rent, this fund helps to promote lifestyle continuity. Last but certainly not least, an emergency fund provides peace of mind when times are good. Instead of worrying about unexpected events, you can relax knowing that everything is taken care of.

Without an emergency fund, you risk running out of money, becoming dependent on credit, or falling into debt. This is financially irresponsible, and it can set up bad habits for your future. At the very least, you’re likely to dip into your savings, with a single unexpected event possibly wiping out years of hard work.

How big should an emergency fund be?

Emergency funds come in all shapes and sizes, with the recommended sum related to the income level, living expenses, and financial situation of the person or people involved. Generally speaking, a personal or family contingency fund should cover a minimum of six months’ worth of living expenses. The fund should be easily accessible, and ideally placed in a separate savings account. If your emergency fund is tied up in complex or long-term investments, you may not be able to access it quickly.

If you want to set up an emergency fund to safeguard your financial future, consider working with an experienced financial consultant, Sean D. Casterline.



Sean Casterline

Wealth Manager at Delta Capital Management located in Maitland, Fl.