Emergency fund
Money set aside only for surprises, like a car repair or a lost job. A common goal is three to six months of expenses, built up over time.
In the news
How “emergency fund” came up in recent issues.
- Oct 22A rocket company's strong profits lifted stocks, and shook phone carriers
“Over four years of high school, that's $2,160, enough to cover many college textbooks or a good start on an emergency fund.”
Practice it
Learn the bigger idea
- Budgeting, explainedA plan for your money before you spend it, and the simple math that shows what things really cost.
- Banking and saving, explainedWhere to keep your money, how to avoid fees, and how to make it earn a little while it sits.
- Insurance, explainedPaying a little now so a disaster later doesn't wipe you out, and the two numbers that decide what it costs.
Related words
- Budget
- A plan for how you'll spend and save the money you expect to get.
- Opportunity cost
- What you give up when you choose one thing over another.
- Cost per month
- The price of something divided by the number of months you use it. It shows the real cost of a big purchase.
- Cost per use
- The price of something divided by the number of times you use it. A cheap item you rarely use can cost more per use than a pricey one you use daily.
- Unit price
- The price of one unit of something, like one can or one ounce. It lets you compare different package sizes.
- Net worth
- Everything you own minus everything you owe.
Test yourself in Word sprint · All money words
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