An Emergency Fund – To Have it OR Not?
Your future will thank you for having an emergency fund in the correct place. It’s important to keep some portion of your paycheck that can serve as adequate coverage during a medical or financial emergency. Just imagine – what if you are caught in a situation that will put you in an urgent need of cash? Critical, right? An emergency fund is a recipe for fiscal fitness, especially when going through a ‘financially turbulent phase’.
Well, this write-up will help you figure out the need to save for an emergency. Come on, let’s begin:
- An Emergency Fund – What Qualifies? —– Simply putting in a way stating that an emergency fund is an aggregated sum of money that is kept aside to take care unforeseen expenses. Believe us if we are saying this, having an emergency fund makes a world of difference to all your finances.
- What is the need? —— With a ‘robust fund’ settled in a place, it is a lot less likely that you will end up succumbing to the horrifying situation of a sudden requirement of finance. Therefore, to beat the nightmare having an emergency fund gives you a sense of freedom.
Just an Example: what if you are bored with your daily job and thinking to start your own business? But, if you have an emergency fund, you will be able to make these decisions with ease.
- How much saving should be done? —— Ideally, your fund should be good enough to cover all your major expenses for at-least 9 months. At first, it will be daunting, but that’s okay, you can start with 3 months for now.
Ways to Establish an Emergency Fund
- One Day at a Time: Decide an amount you can think you can invest each week or month. What’s important is to keep a habit of saving.
- Automate: Prefer opting for an automatic transfer from your account. This will make it easier for you, thus not making you fail.
- Accessibility: Make a few of your funds accessible; don’t lock them up with a criterion of ‘lock-in-period’. This way you can dip into them during emergencies.
Thinking to start an emergency fund? Kudos to you! Also, if you are looking for other financial products, Gulaq has got you covered with the best online mutual funds. Explore!
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.