Emergency funds are the safety net that separates temporary setbacks from long-term financial derailment. Historically, personal finance advice around emergency funds solidified in the late 20th century as consumer credit became widely available; financial planners began recommending accessible cash reserves to avoid predatory borrowing during job loss, medical emergencies, or unexpected home repairs. The recommended size of the fund varies by household type, income stability, and number of dependents — gig workers and self-employed people often need larger cushions than someone with a stable salaried job and dual incomes. Common guidance that appears across banks and financial educators centers on covering several months of essential living expenses: enough to ride out a job search or a medical recovery period without dipping into retirement savings or taking high-interest loans. The “right” number is a blend of probability (how likely is an income gap?) and impact (how long would the gap last?), but most mainstream recommendations land in a specific bandwidth designed to balance liquidity and opportunity cost.