Emergency Fund Planning

What makes You Know Why It Is Important to Have Emergency Fund?

An emergency fund is a store of funds to be used in case of an unplanned expense or shortfall of money. It is a critical aspect of personal finance which makes you go through all uncertainties of life with a lot of confidence.

Loss or reduction of income in job.

1. In case losing job

An emergency fund is a good idea as it will help you hit upon times of inactive job or low earnings.

2. Medical emergencies

An emergency money will be used in medical emergencies where one needs to have unexpected expenses.

3. Vehicle repair

Car problems are costly when they are unexpected; an emergency fund will assist.

4. Appliances and home involve

repairs, dog emergencies, taxes, etc, which are all bills that can be paid using an emergency fund. surprise home costs such as plumbing or electrical problems can be taken care of.

5. How much Saving is enough

Expenses should be directed towards your emergency fund and it should last three to six months.

Where to keep your emergency savings.

1. Job Security

Take a good look at your occupational position In later years life, you come to some certainty of direction But if you have no occupation, This will be called disappointment saving more may be possible in case you are in a risky industry or an independent employee.

2. How Your Emergency Fund Stitching.

In case you have dependents, you might want to save more so that to take care of them.

3. High Interest Saving Account 

The savings will be deposited on a high interest savings account so that the money earns interest and will be able to preserve the liquidity of the cash.

Start adding money in your emergency fund 

1. Start small

Have a short goal, which is possible, such as saving this sum 1 lakh.

2. Adjustment 

Make the adjustments to your emergency fund by adding or removing the amount that you are depositing there regularly.

3. Changes in contribution

Change your emergency budget and make larger or smaller contribution on a regular basis.

When you create a fund on the side as an emergency plan, you will be in a better position to deal with emergencies that would arise in life, and be able to setup financial freedom.