When it comes to building an emergency fund, there are several mistakes that should be avoided at all costs. One common mistake is not prioritizing the emergency fund and instead focusing on other financial goals. Without a sufficient emergency fund, individuals may be forced to rely on high-interest credit cards or loans in case of unexpected expenses, leading to financial stress and debt.

Another mistake is not saving enough for the emergency fund. Financial experts often recommend saving three to six months' worth of living expenses, but this may vary depending on individual circumstances such as job stability, health, and other factors.

Additionally, dipping into the emergency fund for non-emergencies is a critical mistake. Using the fund for non-essential purchases can deplete its resources, leaving individuals vulnerable when a true emergency arises.

Furthermore, keeping the emergency fund in a non-liquid or high-risk investment can be a mistake. The fund should be easily accessible in case of an emergency, so it's important to keep it in a savings account or another low-risk, liquid investment.

By avoiding these mistakes and prioritizing the emergency fund, individuals can better prepare themselves for unexpected financial challenges.