How Large is Your Emergency Fund Buffer?
Life has a way of surprising us. Redundancies, health issues, rising interest rates, and unexpected bills can quickly destabilise even households that appear financially comfortable. Without an emergency fund buffer, these events can lead to spiralling debt, stress, and long-term setbacks. That is why building a financial safety net is one of the most important steps Australians can take toward financial security.
A financial safety net has two main components:
- An emergency buffer fund—readily accessible savings set aside for sudden expenses or income disruptions.
- Wealth protection products—insurance policies that provide income and financial stability in the face of illness, disability, or death.
This article explores both pillars in detail, explaining why they are essential, how much Australians should aim to set aside, the factors that influence the right level of savings, and the role professional financial planners play in tailoring strategies to individual households.
