Emergency fund
From Debt Free Dude
An emergency fund is money set aside to deal with emergencies. Here are some example emergencies:
- Car goes out unexpectedly
- You lose your job and it takes awhile to fine a new one.
- A major appliance breaks and needs replaced.
- You have unexpected major medical expenses.
By having some money set aside for these types of emergencies, you can avoid going into debt for unexpected events.
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