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Portfolios 104: Building an Emergency Fund

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1.
You will likely need an emergency fund most when you're not financially stable.
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True. People who are just starting out are usually most in need of such a fund.
2.
An advantage to using an automatic savings account to build an emergency fund is that it _______.
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Saves you time and energy on finding money to save. Putting your saving on automatic can free up time for other financial planning.
3.
Where is the best place to keep an emergency cash fund?
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Keep your emergency cash fund in a savings account or money market account. These types of accounts are the most accessible in case of an emergency.
4.
A retirement account is not a good candidate to hold an emergency fund.
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True. Retirement accounts require years to build up. When you take money out now, you can lose a lot of growth in future years.
5.
Why are stocks not considered a good parking place for emergency funds?
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The stock market is volatile. It is possible for the price of your stock to be down when you need the money to cover an emergency expense.