It’s money saved for unexpected expenses, such as having to replace an appliance.
What is it for?
In order not to go into debt or alter your savings plan due to unplanned expenses. This way you can have peace of mind.
How much money should you put in?
3 to 6 months of your fixed expenses. From there, put in the amount you feel confident with.
How to build your emergency fund
Step 1. Calculate what your monthly fixed expenses are. You can make a personal budget to find out.
Step 2. Multiply that number by 3 and by 6. This way you will know what your goal is.
Step 3. Calculate how long it will take to achieve your goal with your current savings. Save at least 5 % of your salary.