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Inflation

Submitted by Philip Brewer on March 1, 2008 - 08:46.

The purpose of an emergency fund is to allow you to adjust to changed circumstances in the case of an emergency.

Often an emergency fund will also make a little money, in the form of interest. Other times, the interest earned won't be quite enough to keep up with inflation, meaning that you fall a little behind. But the goal is not the little bit of interest that's earned. The goal is the protection that comes from having some ready cash. Even if you have to pay a little for that protection, if you need it, it's well worth the small cost.

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