Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

There are hundreds of reasons that smart people put off creating an emergency fund: confidence that a job is secure, being in good health, maybe just feeling lucky. But can you guarantee that none of the following situations will ever apply to you? Probably not, so listen up and decide whether it’s worth the risk to go without.

1. Car trouble. If you backed into a fire hydrant or your timing belt snapped tomorrow, would you have the cash ready to fix your ride? Even if you lease a car (rarely a good idea to begin with), if you are over your allotted mileage when you trade your car in, you’ll need to pony up to cover the difference.
2. House maintenance. Summer is coming, and what you don’t want is to come up short when the central air dies in the middle of July. Even if you rent, having money to spare will help when it’s time to rent that U-Haul and move to another place. (At least, it’s a rare landlord who will return a deposit before the very end of the agreed-upon term.)
3. Job loss. The economy may be showing signs of recovery, but the job market is still shaky. Having a few months’ worth of expenses in the bank protects you from borrowing heavily on high-interest credit cards if you should lose your main (or only) source of income.
4. Medical care. Let’s say you have the good fortune to be in excellent health and have a health-insurance plan: You still need money on hand when medical issues arise. Ambulance rides aren’t always reimbursable, for example. And if you or your partner were to have a healthy baby while covered by a health plan, you could still get hit with out-of-pocket hospital delivery bills of more than $3,000. No insurance? Plan to pay at least triple that.
5. Peace of mind. Having a fat piggybank does wonders for letting you sleep at night. You can rest assured you’re prepared for whatever life might throw at you.

Convinced yet? Here are some ideas on how to get your fund started.

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