You have created your financial plan and are doing well sticking to it. You have more than enough money to pay all of your living expenses and enough left over to save up for that new computer. You are almost to your savings goal when the unexpected happens. One afternoon, when playing soccer with your friends, you break your leg and end up in the hospital. Now, not only do you have to worry about medical bills, but you also have to take time off work while your leg heals so you won't have that income for several weeks. To prepare for these unexpected situations, it is good to have a reserve fund, sometimes called an emergency fund, to help pay for these unexpected incidents. The size of your reserve fund should be based on your average living expenses. Experts say having at least three months of living expenses is wise. 1. How is an emergency fund like and different from a savings account? 2. Why are emergency funds important?