An emergency fund protects you in times of need. We all have expenses pop up in our lives that we’re not expecting. It could be a trip to the doctor, new tires, or a plumbing fiasco. An emergency fund is a rainy day fund. It helps you avoid having to use your credit card or take on more debt to cover the unexpected.

Credit cards carry high interest rates and are not ideal for emergencies. Similarly, more debt to cover an emergency can make it even harder to pay off the debt you already have. Emergency funds protect your finances long term.

Here are some of the most common reasons you’d need an emergency fund.

Home Repairs

Pipes burst. The fridge stops working. Your washing machine goes haywire. Your roof springs a leak. Home repairs are among the most common reasons you need an emergency fund.

First, the maintenance costs can be high if you have to call out a professional to diagnose the problem. Electricians and plumbers can be costly even for small issues. If your plumbing starts acting up, you not only have to pay for parts. You also have to pay for labor for your plumber.

Similarly, if your roof gets damaged in a storm, your insurance may not cover it. Interior and exterior home repairs can get costly quickly.

Using a Makita drill to screw into a wall.

Car Repairs

Most Americans spend up to a sixth of their annual income on their vehicle. That includes insurance, gas, basic repairs, and monthly vehicle payments. But many forget to include major repairs to their list of monthly expenses! New tires for a car can be expensive. So is blowing a gasket or burning out a key engine component.

Without an emergency fund, these expenses can be a big burden. They can catch you off guard and set you back months of progress with your saving and budgeting.

But an emergency fund is the perfect way to pay for a new set of tires. A few hundred dollars can come out of your fund and keep you with a vehicle that can get you to and from work safely.

Job Loss

The biggest fear many Americans have is losing their job. Losing your main source of income means bills pile up while you search for something else. It can also mean covering health insurance out of your own pocket. For many, a job loss can be financial ruin. But an emergency fund can protect you from some of these hardships.

During a job loss, an emergency fund can be used to cover your essential expenses in between jobs. Having money in the bank means you can breathe easy knowing you have your core bills and expenses covered.

Ideally, an emergency fund should cover between three and six months of expenses. That includes mortgage and rent, utilities, and other essential bills. Having this much saved can seem daunting if you don’t have any money put away right now. But by starting in small chunks, you can make a sizable dent in your savings account.

More than anything, an emergency fund is a vehicle to prevent you from taking on additional debt. If you have existing debt like student loans or credit

Debt can be leveraged in positive ways, but for emergency situations, it should be a last resort.