An emergency fund covers at least three to six months of essential expenses. Keeping this cash in a high-yield savings account helps you weather job loss, medical bills, or sudden repairs without liquidating long-term investments at the wrong time.

Start by calculating critical monthly costs such as housing, utilities, food, insurance, and transportation. Multiply that number by your target number of months to set your goal.

Automate transfers to your emergency account each payday. Treat the fund like an insurance policy so you only draw on it for true emergencies, then replenish it right away.