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Building a Savings Plan
The Need for an Emergency Fund
It is generally recommended that you have cash funds sufficient to cover three months of expenses. Some of these funds cover operating expenses, while the remaining serves as an emergency fund. Ideally, the money you need should be in places that are easy to get to, e.g., bank and credit union savings accounts, and bank, credit union and money market accounts. These are liquid. You can turn them into dollar bills easily. Although they are generally regarded as lower-risk, you should know that money market accounts are not federally insured (the way most banks are for deposits of up to $250,000). If you don't have any cash reserves, here are some other sources of emergency funds:
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