Why emergency savings can protect a debt-payoff plan.

An emergency fund is cash reserved for unexpected expenses or income interruptions.

An emergency fund, also known as a contingency fund, is a personal budget set aside as a financial safety net for future mishaps or unexpected expenses. A critical part of financial planning, it is supposed to ensure one's personal finances are prepared for any emergency so that the risks of becoming dependent on credit, falling into debt, or running out of money in general are reduced if such a situation were to occur.