An emergency fund is an account you only use in case of job loss, medical emergencies, or other major unforeseen circumstances. Once the money is used, it needs to be replenished. Finance experts say you should have 6-9 months of living expenses in your emergency fund. A sinking fund is an account for a specific planned expense, like buying a house or car, taking a vacation, etc. These are known or planned for expenses, while an emergency fund is for unexpected expenses.