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Emergency fund
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Emergency fund

On the 10th day of Christmas, my true love gave to me: an emergency fund. This gift is perfect for those on your list in their 20s or older.

Helping a loved one "seed" an emergency fund in the savings vehicle of their choice doesn't mean the money is likely to sit there for long.

"Frankly, most of the unknowns covered by emergency savings are really known to us. We may not know when they happen, but we know that they will happen," says Seaman.

Case in point: holiday spending.

"It doesn't surprise us; we know every December we're going to be giving gifts," she says. "We can prepare for that. Or, if you have a car, you know you'll probably take it to the shop for something. Other things such as your health care deductible, you don't know when they might come up, but you can be certain that they will at some point."

Having an emergency fund of three to six months' worth of income stashed away acts as a hedge against a potentially larger financial blow.

"A big reason for an emergency fund is you don't want to have to put it on a credit card and have to pay 18 (percent) or 22 (percent) or 26 percent on an emergency," Seaman says. "It's much better to have it in cash."


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