An emergency fund is a savings account set aside specifically for unexpected expenses, like medical bills or car repairs. It acts as a financial safety net, helping you avoid debt when life throws surprises your way. Ideally, this fund should cover three to six months' worth of living expenses, providing peace of mind during tough times. Building an emergency fund starts with setting a savings goal and contributing regularly, even if it's a small amount. You can keep this money in a separate account to avoid spending it on everyday purchases. Having an emergency fund empowers you to handle life's uncertainties with confidence.