Do I need an emergency fund?

Do I need an emergency fund?

Do I need an emergency fund?

An emergency fund is a good idea no matter who you are. Luckily, if you already use a savings account of any kind, you're already well on your way to having a dedicated emergency fund.

An emergency fund is a good idea no matter who you are. Luckily, if you already use a savings account of any kind, you're already well on your way to having a dedicated emergency fund.

An emergency fund is a good idea no matter who you are. Luckily, if you already use a savings account of any kind, you're already well on your way to having a dedicated emergency fund.

Apr 6, 2023

Sam Lipscomb

3

min

An emergency fund is an amount of money you set aside for use in case of unexpected expenses like job loss or a big medical bill not covered by insurance. The words “emergency fund” have a bit of a scary connotation to them, but at the end of the day, an emergency fund is more or less a savings account - and savings accounts shouldn’t be scary.

The benefits of an emergency fund

The reason why many people make a distinction between an emergency fund and a savings account is that it’s common practice, especially as a young adult, to keep the majority of your savings as investments. Whether you’re investing in low-risk exchange-traded funds or individual stocks like Apple or McDonald’s, invested savings aren’t as accessible as money that’s just sitting in a savings account. An emergency fund, on the other hand, is typically kept in a savings account so that you can have quick access to cash without having to sell investments.

At the end of the day, a savings account is more or less the same thing as an emergency fund - so if you have a savings account that you add to regularly, good work! The next step should be to figure out exactly how much you want to have in your emergency fund. Once you reach that number, it’s a good idea to try and invest the rest of your savings. After all, having an emergency fund is a good idea, but you won’t generate much in returns, and your money will lose value over time to inflation. An emergency fund should be for, well, emergencies.

Sam Lipscomb

Author bio

Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.

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© Fizz Inc. © 2024 All Rights Reserved.


WeWork c/o Fizz; 154 West 14th Street; New York, NY 10011

ShoulderTap Technologies Inc. d/b/a Fizz (“Fizz”) is not a bank. Banking services are provided by Patriot Bank, N.A. Fizz Mastercard Debit Cards (“Fizz Cards”) are issued by Patriot Bank, N.A. pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of Fizz’s services are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of Fizz’s services are offered and managed by Fizz, not our bank partners.

Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®, and Transunion®.For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the ShoulderTap Technologies Inc. d/b/a Fizz Consumer Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.

Testimonial Disclaimer: Review provided by customer to ShoulderTap Technologies, Inc. d/b/a Fizz directly. The comment above is related to individual experiences or results. Individual results may vary.

© Fizz Inc. © 2024 All Rights Reserved.


WeWork c/o Fizz; 154 West 14th Street; New York, NY 10011

ShoulderTap Technologies Inc. d/b/a Fizz (“Fizz”) is not a bank. Banking services are provided by Patriot Bank, N.A. Fizz Mastercard Debit Cards (“Fizz Cards”) are issued by Patriot Bank, N.A. pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of Fizz’s services are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of Fizz’s services are offered and managed by Fizz, not our bank partners.

Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®, and Transunion®.For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the ShoulderTap Technologies Inc. d/b/a Fizz Consumer Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.

Testimonial Disclaimer: Review provided by customer to ShoulderTap Technologies, Inc. d/b/a Fizz directly. The comment above is related to individual experiences or results. Individual results may vary.