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.

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