Question
You want to know why you should have an account with money sitting around. Why should you prepare for an emergency fund?
Answer
Emergency money is needed for these things:
1) Unexpected dental bills.
2) Unexpected medical bills.
3) Sudden job loss. Some employers get behind in their payments, and the employees believe payments are forthcoming, but the delay can turn into years.
4) You get into car accident.
5) An investment opportunity with a short-duration window of entry. One example is cryptocurrency has increased its value exponentially in the past 10 years. Often emergency money shouldn't fund investments, but these situations come up.
6) A relative in need.
7) There are criminal allegations against you (e.g., with a mistaken identity) and you need to hire an attorney.
8) You are audited by the IRS (you may want an attorney to represent you or your liability will be much higher than you thought). Your state's income tax liability may be higher than you expected if your withholdings were not done correctly.
9) Housing issues (e.g., your landlord raises the rent or you need to repair your home).
10) Credit cards can have high interest.
It is less stressful to have emergency money.