Even though one of the most significant factors in our life is the state of our personal finances, we rarely spend time on managing them since unlike businesses, we are not accountable to any one for our personal financial goals and results.
We can make a much larger contribution in every area of our life when our personal finances, investments and taxation are properly planned.
In life you should expect the unexpected, and this is why you need an emergency fund.
- Job loss
- Medical expenses.
- Home repairs.
- EMI’s increasing due to interest rate hike.
- or something you’ve never dreamed off.
Emergency Fund :
- One must keep 3-6 months of living expenses in the emergency fund to meet any future contingencies.
- Depending on your specific situation and whether or not you have children, carry substantial debt and types of insurance coverage will determine what amount is best for you.
- Not only Saving regularly but to Investing that saving.
- Starting early.
- Using tax shelters.
- investment returns should exceed the inflation.
It is important to keep this emergency fund in a place that is fairly liquid so that you can get to the money quickly in the event of an emergency.You can have emergency fund in your saving bank account, bank fixed deposits and liquid mutual funds.You also don’t want to have this money tied into stocks or equity mutual funds because the volatility of the market could cause you to lose money over the short-term.
