An emergency fund is the single most important financial safety net you can build. While market returns are attractive, they are unpredictable — and money you need during a crisis should not be exposed to that volatility.

Why it matters
Emergencies — job loss, major medical bills, urgent home repairs — often happen at the worst possible times. Having 3–6 months of essential expenses set aside prevents forced selling of investments at a loss and reduces stress.

How much should you save?

• Single-earner, low expenses: 3 months.

• Dual-income, stable jobs: 3–6 months.

• Variable income or dependents: 6–12 months.

Where to keep it
Use safe, liquid places: high-yield savings accounts, short-term fixed deposits (if accessible quickly), or sweep-in savings that give interest but allow withdrawals.

How to build it fast

• Automate a small portion of salary into a separate account.

• Temporarily cut non-essential spending and redirect the savings.

• Use bonuses or tax refunds to top up.

When to use it
Only for true emergencies — not vacations, gadgets, or speculation. If you dip into it, prioritize rebuilding it.

Bottom line
An emergency fund may not be glamorous, but it’s the foundation. With a buffer in place you can take calculated risks with the rest of your portfolio — rather than reacting under pressure.