Emergency funds

None of us can predict when an emergency will occur in our life. It can come in the form of natural disasters, loss of job or death in the family. So it is better that you create an emergency fund which will prove to be helpful during uncertainties of life.  The money should be deposited in risk free accounts, which can be withdrawn at any point of time. Don’t go for emergency fund account that has an ATM.When you have an emergecy fund, you are much less likely to go into bankruptcy, foreclosure or to start accumulating large amounts of debt.