Glossary · Couples finance
Emergency Fund
/ɪˈmɜːr.dʒən.si fʌnd/ · noun
Definition
A reserve of cash set aside for unplanned expenses or income loss: typically 3-6 months of essential expenses.
An emergency fund is liquid cash, held in a separate account, intended to absorb unplanned financial shocks: job loss, medical surprise, major repair. For couples, the recommended size is 3-6 months of essential shared expenses (rent, utilities, groceries, minimums on debt) rather than 3-6 months of total income.
The fund's purpose is to remove acute financial fear from major life decisions. Couples with a real emergency fund argue less about small purchases, because the buffer absorbs the existential anxiety those arguments are usually actually about.
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