Get Prepared With This Complete Guide on Emergency Funds and Cash Reserves

An emergency fund called a “rainy day fund” or “cash reserves” is money you have access to in case of a sudden unplanned need. Typically, these funds are in the form of cash or cash equivalents. 

Life can be expensive at times. Unexpected expenses are indeed not unexpected. Events like car repair, small medical bills, or broken cell phones are likely to happen occasionally. 

Recently, a popular stat has inspired many articles and tweets — 40% of Americans can't cover a $400 emergency expense. 

Avoiding Unnecessary Debt

If you don't have cash available to pay for an expense like this or suffer a job loss, the alternatives don't offer a positive outlook. 

Help Manage Investment Or Economic Volatility

Even if you have some investments, volatility cannot be predicted with certainty. 

Safeguard Against A Job Change

Perhaps most importantly, having an emergency fund in place can give you the security to boldly pursue a new opportunity in your career or the confidence to leave an unhealthy workplace. 

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