When COVID struck, it decimated the income of hundreds of millions of people worldwide.
When COVID struck, it decimated the income of hundreds of millions of people worldwide. One thing it did do was drive home the need for us all to keep Emergency Funds because you never know when financial disaster can strike, whether through loss of income or unexpected, huge expenses.
The standard recommendation is to keep a minimum of six months' living costs in an accessible short-term deposit account. It won't give you the best financial return because you need to keep it liquid, but it will give you peace of mind, just like insurance. You may not be able to get to six months quickly, but at least make a determined start and build it up.
Some people might be tempted to think of their credit card or home equity loan as emergency finance, but I would not recommend that at all. Why? Because using that source during financial hardship will incur more debt that you will have to pay in the future. That's is only going to double your already high-stress levels.