May 05, 2021 Pixabay Rule number one: An emergency fund must be available yet difficult to access. Learn how and where to build up your stash. An emergency fund is ideally six months’ worth of income that you leave untouched until life throws a financial emergency your way. Having a sizable sum of money set aside for rainy days can help you avoid going into debt should an unexpected situation arise. Another reason? The psychological assurance of knowing you have an emergency cash fund to buffer against the blows of life’s unforeseen circumstances. What constitutes an emergency varies from person to person, but it’s usually an unexpected medical expense, sudden job loss, urgent housing repairs, or pet surgery. Your emergency fund may also be used to help loved ones who need urgent financial assistance to tide over life’s challenges.