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Glossary entry · Money in motion
Emergency fund
Definition
A reserve of cash — typically 3 to 6 months of essential expenses — held in a savings account for unexpected costs (job loss, medical, urgent repair). The first thing to build before investing seriously. Without it, you risk being forced to sell investments at the worst possible moment.
Example
If your essentials cost €1,500/month, your emergency fund should hold €4,500-€9,000 in easy-to-access cash.
Related
Money in motion
Compound interest
Interest paid not just on what you put in, but on the interest you have already earned.
Read →Inflation
The rate at which the general price of things rises. Same money, less purchasing power.
Read →Interest rate
The percentage something pays — or costs — per year.
Read →Return
The gain (or loss) on an investment, usually expressed as a percentage per year.
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