Emergency fund

Savings set aside only for unexpected costs, like a car repair or job loss.

An emergency fund keeps a surprise expense from turning into credit card debt. A common goal is 3 to 6 months of essential expenses, kept in a savings account you can reach quickly.

That can feel out of reach, so many people start with a smaller first goal, such as $500 or $1,000, and build from there. A bonus paycheck is a good way to give it a head start.