An emergency fund is a savings account set aside specifically for unexpected expenses, such as medical bills, car repairs, or job loss. It acts as a financial safety net, helping individuals avoid debt when faced with sudden financial challenges. Experts often recommend saving three to six months' worth of living expenses to ensure adequate coverage. Building an emergency fund involves setting aside a portion of your income regularly. This can be done through automatic transfers to a separate savings account, making it easier to grow your fund over time. Having an emergency fund provides peace of mind and financial stability during uncertain times.