Answer: I got this question on a test it’s A
Explanation:
The foolproof formula for the amount of money you need in an emergency fund is to have essential expenses covered for at least 8 to 12 months
An emergency fund, also known as contingency fund, is a personal budget set aside as a financial safety net for future mishaps or unexpected expenses.
The term “emergency fund” refers to money stashed away that people can use in times of financial distress. An emergency fund is used to improve financial security by creating a safety net that can be used to meet unanticipated expenses, such as an illness or major home repairs.
Assets in an emergency fund are more likely to be cash or other highly liquid assets. This reduces the need to either draw from high-interest debt options, such as credit cards or unsecured loans, or undermine your future security by tapping into retirement funds.
Essential expenses are every expense related to living. For example, expenses such as rent, mortgage, utilities, groceries, or medication are essential ones that you need to pay for living.
You have to pay for Essential expenses no matter what, because you either need them or they are a financial responsibility for you
Hence, option A is the correct answer
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