Emergency Fund

Here comes the rain again
Raining in my head like a tragedy
Tearing me apart like a new emotion
--Eurythmics

An emergency fund is simply savings put away 'just in case.' An unforeseen expense such as a car repair or an emergency room visit could trigger these savings.

The WSJ reports that less than 40% of Americans have personally saved funds to cover such an expected expense.

Financial advisers often suggest that individuals build at least six months of living expenses in their emergency fund. Given that the great majority cannot even afford an unexpected $1000 expense, it appears that the number of Americans that could fund six months with no income is miniscule.