An emergency fund is simply money you’ve set aside for life’s unexpected events. Sometimes it is also referred to as a rainy-day fund. However, a good alternate name (and the positive of all!) for this fund which I personally love is the “Peace of Mind” fund. You sleep better when you know you have three to six months of your expenses kept away in a savings or money market account.
No matter what life tosses at you — home repairs, car accident, hospital visit, job loss, what have you — you’ll be calm and cool. Because your “Peace of Mind” fund will have your back!
Having a financial safety net is one of the best decisions you can ever make in your life. You can never put a price tag on the peace of mind that comes with having a fully-funded emergency fund — you know that whatever curveball life throws at you, you are equipped to effectively deal with it.
A good chunk of savings set aside easily turns a major life crisis into a minor inconvenience. Wouldn’t it feel great to have this kind of buffer between you and whatever challenges life brings?