According to officials at Fort Knox Army Community Service, an emergency fund is important to having the means to pay for unexpected emergencies that might otherwise sideline everyday expenses.

They suggest it might also protect your financial future.

"An emergency fund is important for a number of reasons," said Shannon Wilson, a financial readiness and Army Emergency Relief program manager. "An emergency fund is liquid monetary funds in an account that you can get quick access to in times of a valid emergency."

Wilson warns that big or small emergencies like vehicle repairs, minor home repairs, medical or dental expenses, the loss of a job or income, even a natural disaster, can become catastrophic again after the initial threat is gone.

"Emergencies are going to happen, even when you are trying to get out of debt, and if you need to keep relying on credit or dipping into your long term savings, you're never going to get there," she said. "You'll just keep getting in more debt and keep paying for the emergency in interest."

Wilson said a little preparation can go a long way, suggesting the best time to start is now.


"We want Soldiers to begin building that small pot of money that they can have on hand at all times," said Wilson. "Start with what you can, then build from there."

Having the money on hand doesn't necessarily mean having the money in hand, said Wilson.

"The average person has a hard time mentally wrapping their minds around [having] a large sum of money sitting in an account waiting for an emergency," said Wilson. "This is the money that is only for emergencies."

An emergency fund should be fluid, where they can get to it in an emergency, but Wilson warns Soldiers to guard their fund from the caprice of impulse spending by automatically contributing into a separate savings account.

"Once you get an emergency fund [established], build it by saving automatically," Wilson said. "Set up an allotment [that goes] to a savings account each month and [budget it] as a monthly expense."

Unprepared Soldiers can get into real trouble when an unexpected emergency arises, according to Wilson, who said although she wants Soldiers to know how to care for themselves, she knows that's not always the case.

"Soldiers should be self-reliant. They need to know how to manage their money," Wilson said. "The dynamics in the military are different, and that is one reason that the Army Emergency Relief fund exists with its no-interest loans that are paid back with no fees attached."

Not every circumstances qualifies for assistance, but Wilson said the AER has expanded, adding new categories to assist active Soldiers and veterans in times of financial need," said Wilson.

Wilson said those reasons have included everything from emergency travel, to minor vehicle or home repair to medical and dental emergencies to outright natural disasters.

"Assistance is provided in the form of no interest loans or grants or even combinations of loans and grants," said Wilson.