<prompt> Human: I keep seeing talk of an emergency fund and I have a few questions about the specifics: 6 months. Is that 6 months of expenses or income? If expenses, is that current spending level or spending level in the event of an emergency? If I lost my job, for example, I would stop driving to work car expenses, could stop going for mealsdrinks etc. How liquid does it need to be? Ive noticed some people have bond ladders set up where a bond matures every month so they will have a months expenses coming to them every month. That works for a job loss but that doesnt work for a huge up front cost like a medical accident or significant housecar damage that isnt covered by insurance. Is that ok? Is that an acceptable risk? Or should you have access to the full amount instantlywithin a couple days? What exactly is an emergency? I have seen some posts where people spent their E funds on car repairs, vet bills, plumbing, electronics. To me, those arent emergencies. If you own a car, you can expect to have to pay for repairs, if you own a dog you can expect to take it to the vet. if you own a house, stuff is going to break and electronics are certainly not an emergency. For my car I set aside money for expected repairs, if I owned a pet I would do the same. Doesnt spending your E fund on such things defeat the purpose? If you spend it on car repairs and then lose your job suddenly you may not have 6 months expenses to live off of while you look for work. Or is that the point of the emergency fund? Rather than setting aside money for specific expenses one might expect to incur you save up a big pot for emergencies that are actually irregular but expected expenses, in addition to the cushion of cash in the case of some true emergency like a job loss.  <response>: Since you never know beforehand what you need, this is very difficult. I think it would also depend on your exact position: for example, are you a couple with two incomes, or are you the single provider for a family of seven kids. Are you young and healthy, or are you aging a bit already and developing some small problems moving etc. How steady is your job? And finally also a bit: how risk-aversive are you. For me, I would hold on to six months of necessary expenses, because my biggest risk is losing my job and needing to find another one. I have good health insurance, here in the Netherlands. No car, no house, no people depending on my income cept me. For most medical emergencies etc you could work out a payment plan, and then use the money that is freed up monthly from a CD ladder to pay those monthly payments. I guess the same would go for house repairs. Nobody would expect you to be able to hand someone else 20k right away for emergencies. Maybe you cant pay in monthly steps for car repairs, but I hope your car doesnt need repairs that are that expensive, if so you should consider buying a new 2nd hand car instead. I would indeed only use the emergency fund for unforeseen emergencies. Normal house repairs and annual car check-upsoil changes etc are not unforeseen although you cant predict the exact timing and the same goes for normal health expenses or animal health expenses. I need to pay 220 euros annually out of my own pocket if I use any healthcare, so saving up 20 euros per month for this is my way to handle this. I can imagine that you sometimes do use money from the emergency fund for, for example, house repairs. If youre saving up to get your say 10k house repair jar filled but only have 3k so far, but suddenly the roof starts leaking and needs to be repaired for 8k, maybe it is wiser to use 5k from the emergency fund than waiting until you have the 8k needed but your wood started rotting in the meantime. It would mean that getting back 5k to the emergency fund becomes an urgent priority then. 