Having an emergency fund is crucial before you start investing because it provides a safety net for unexpected expenses. Ideally, you should aim to save 3 to 6 months' worth of living expenses. For example, if your monthly expenses are $2,000, your emergency fund should be between $6,000 and $12,000. This ensures you won't have to sell your investments in a hurry if something unexpected happens, like a car repair or medical expense.

An emergency fund is a savings account specifically set aside for unforeseen expenses or financial emergencies. It acts as a financial buffer that helps you avoid debt and gives you peace of mind, allowing you to invest without the stress of immediate financial needs.