Rethinking the Emergency Fund

Unexpected events can knock on the door at any time. Laid off today, and rent is still

due next week? Car engine failure? They say your pet will be fine, but only after a

$2,000 deposit? And yes, the best way to manage those risks is an emergency

fund. But if you still treat your emergency fund like a simple savings of three

to six months of income, you are ignoring the complex reality of risk.

Today, we are going to get nerdy. We are going to deconstruct the

emergency fund not as a generic stash of cash, but as a self-structured fund with one single

job: to mitigate risk in your future. First, we will begin by redefining the risk