What are emergency or contingency funds for?
Many a times in life there are situations where you need money immediately. For example, if you lose your job, if your car breaks down or suffers a major accident and needs to be repaired, if you or a family member need to be hospitalized, or you need to travel urgently. At such times, you need cash immediately often in a day or two. To meet these needs, you either need to borrow or have your own kitty kept aside. Financial planners suggest building an emergency fund, which is a stash of money, kept aside to cover such situations.
