These two are often confused, but they serve different purposes.
| Type | Purpose | Use When... |
|---|---|---|
| Emergency Fund | Covers unexpected expenses | You lose a job, your car breaks down, etc. |
| Regular Savings | Helps you reach short-term or fun goals | You’re saving for a trip, a new phone, or a move |
Pro Tip:
Keep your emergency fund in a separate savings account so you’re not tempted to touch it.