1. Buying a home
When purchasing a home, you’ll likely deplete your savings for the down payment. An emergency fund provides extra cushioning for unforeseen expenses like appliance repairs or utility increases, helping you avoid living paycheck to paycheck after moving in.
Moving costs can be unexpectedly high. An emergency fund prevents you from depleting your savings on moving expenses, ensuring you have money to cover unforeseen costs associated with setting up your new home.
Traveling involves upfront expenses for flights, hotels, and activities. Unforeseen circumstances can also arise during your trip. An emergency fund provides financial preparedness for unexpected expenses, allowing you to handle surprises without stress.