Why do I need emergency savings?

Everything you need to know about emergency savings, regardless of your financial situation

Imagine you’ve just returned from a great vacation abroad. You find out your close friends are getting married across the country in a few months. You go ahead and book your plane tickets, not wanting to miss out on the cheap airfare. You forget this is also the week you have an optometrist appointment and need to buy new contacts. Like always, rent is looming just around the corner and your checking account isn’t looking so hot. Unfortunately, payday isn’t for another week. What do you do?

How much should I have in my emergency savings?

So, we’ve established you need emergency savings, but how much should you have saved? It depends on what your current financial situation looks like.

Where should I keep my emergency savings?

Since they’re emergency savings, it makes the most sense to store them somewhere that’s as accessible as possible and isn’t at the mercy of the market. However, when you choose to go with a typical savings account, you wind up losing value when you aren’t even earning enough interest to beat inflation.

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