Emergency funds are exactly what they sound like, money that you have saved in case of an emergency. Such an emergency might present itself in the form of a job loss or an illness, but no matter what happens your emergency fund is what you’ll rely on when there is no more money coming in. To decide how large your emergency fund should be, you should first attempt to tally your average monthly expenses, including home payments, utilities, food, car, etc. Once you have that, you should decide how long you want your emergency fund to last. A good rule of thumb is 6-12 months. So if your monthly expenses are $3000, and you want to be able to survive on that for 6 months, you should have $18,000 in your emergency fund. For more details on saving for your emergency fund, read the full article here.