1. I personally think that an emergency fund is essential, and should be one of the building blocks to a person's financial portfolio. Everybody needs a buffer, as “problems” can and do arise. Things just happen, based on odds, whether truly expected or not. Be prepared!

    As for downsides of emergency funds, I don't really see any. The one caution I see though, is that some people might mistake an emergency fund for a necessary expense fund. For example, if you know your car is about to fall apart, and then it does, you shouldn't be diving into your emergency fund to replace it. Rather, you should be tapping into the savings you've already set up to buy it.

    It may be hard to transition to this type of approach for many people, no question about it. But the long term benefit to focusing on savings and making a part of that an emergency fund, is well worth it.
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    • Very good comment Squirrelers! I agree with you. In my opinion, I didn't see any downside to an emergency fund either.
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  2. I am still working on building up a 6 month emergency fund while trying to pay off debt and invest at the same time. Let's hope no crazy emergencies happen in the meantime! lol
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