Ans. An emergency fund is typically money set aside to cover unexpected expenses if you encounter one. Financial experts suggest having at least three to six months of your living expenses as an emergency fund. This way if you face unexpected expenses like medical emergencies or loss of income, you will have a safety net to fall back on. If you decide to build an emergency fund, make sure to keep it in a safe instrument like savings or money market accounts.  You can also build your emergency fund and invest at the same time by dividing your money.