To avoid any kind of unwanted danger in future, we must keep aside money for emergency.
Emergency fund: We have also seen and faced the horrors of the Corona epidemic. When everything was closed, only the money saved for the emergency came in handy. This havoc of nature has made people understand the importance of saving.
The employment of many people came to a standstill, lakhs of people became unemployed, not knowing how many people had to live on low wages.
Therefore, to avoid any unwanted danger in future, we must keep money for emergency.
Financial experts believe that everyone must have an emergency fund or a contingency fund. Experts believe that any person must have an emergency fund of at least 6 months. If you earn 50 thousand rupees a month, then you should have an emergency fund of at least 3 lakh rupees. This fund should be separate from your savings and investments.
If a person earns 50 thousand rupees a month. If any trouble comes and that person’s source of income ends, then in such trouble, if he has kept an emergency fund, then the trouble can be easily faced. If a person has a budget of 6 months to run the house, then he can face that trouble without getting too much stress and it will not have any adverse effect on the family.
How to Build Emergency Fund
Now it comes to what should be an emergency fund and how it can be deposited. Because when you discuss this fund with someone, the person immediately answers that he saves some money every month from his salary or income by depositing it in various schemes.
Financial experts do not consider this type of savings or investment as an emergency fund. Because the savings or investments you are making in this way are doing it to meet the future financial needs. Some have to collect money for the education of their children and some for marriage. Some have to deposit money for a house and some for pension in old age.
Therefore, if the money deposited for the future is spent during the emergency, then future plans will be ruined. Emergency fund is prepared so that future plans should not be ruined.
Now the question comes as to how this fund should be, on which experts say that the emergency fund should be liquid. It should not make much difference to the market risks. It should be giving more returns than the bank. And it should be used only and only in emergency.
Where to save the
emergency fund You can divide your emergency fund into three parts. It can be divided into ultra short term, short term and medium term. You can also invest in debt funds. You can also deposit emergency fund in schemes like Fixed Deposit (FD) or Recurring Deposit (RD). The emergency fund should be kept invested in such a place from where it can be withdrawn immediately at the time of need.
emergency fund should be kept with you in the form of cash or kept in the savings bank account of the bank. You can also keep the amount of emergency fund in Liquid Mutual Fund. In Liquid Mutual Funds, only money market securities are invested. Because of this, the risk in them is very low.
Keep increasing with inflation
Emergency Fund It is not enough to deposit money only once for an emergency fund. Because inflation is increasing continuously. Therefore, keep increasing the emergency fund that you have prepared according to the time.
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