Things do not always go according to plan. However sensible a budget is, and however carefully you save, occasionally unexpected things happen. It is advisable to have an emergency fund for such times.

The amount of money in your emergency fund depends on your financial commitments. Adults may need to have enough money to cover essential purchases should their income change or if they need to travel at short notice.

Younger savers may need to consider why they might need emergency funds. It may not be realistic for children to have a large amount of money saved only for emergencies. Still, it is sensible to think about the range of situations in which you may need access to cash immediately. It might be replacing a lost or damaged possession such as a phone.