Short-term emergency savings
If you have a fender bender and have an insurance deductible, how will you pay for it? If your furnace or air
conditioning goes out, where will the money come from to repair it? What about an unexpected dental or medical
expense? Would you be able to pay it up front or be forced to put it on your credit card?
When you have a short-term emergency fund, you can use your savings to pay for these types of expenses instead of
incurring more debt