Emergency fund

Emergency fund — 3–6 months of essential expenses (deeper for lumpy business income) held in instantly liquid, PDIC-insured accounts. Its return is not the interest: it is never being forced to sell investments in a drawdown, max a credit card, or take a bad client to cover a surprise. The first real rung of the Financial Order of Operations.

First used in: 1.2 · The PH order of operations