How much BIG should be your Emergency Fund ... !!

How much BIG should be your Emergency Fund ... !!

What if your emergency fund isn’t actually big enough for your biggest emergency? You’ve probably heard that keep 6 months of expenses as your emergency fund. So if you spend ₹60,000/month then keep ₹3.6 lakh emergency fund. This is the ideal formula which is normally followed or educated.

But what if a ₹15 lakh medical emergency hits ?

Suddenly, your “So Called Emergency fund” will cover only 30% of the problem and now you’re forced to break investments, sell assets or borrow money. The may be an unusual situation that may arise but oviously when we are talking about Emergency fund we need to think of any extreme situations also.

That’s why your financial safety net needs 3 layers:

💰 Emergency fund ~ for short-term shocks

🏥 Health insurance ~ for medical emergencies

🛡️ Term insurance ~ for protecting your family’s income

But there is one more catch which you need to understand how much insurance you actually need without getting lost in endless policies. For that best suggestion on this, connect to your Financial Coach or advisor who can guide you the way ahead. Just be emergency ready because such situation creates havoc & are bad curses to your Long term planning.

by
Narendra Kr Surana
Volatility Coach & a Wealth Architect
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