Emergency Fund Planning
Emergency Fund Planning is very very important for the journey of wealth creation and a comfortable life.
You Must make a proper Emergency Fund Planning for yourself.
Let’s Learn about Emergency Fund.
Emergency fund is an absolute necessity for financial security because they give cushion to fall back in case of illness and inability to work or in any other unexpected temporary problem.
Now, What amount of Emergency Fund You Must Have?
The minimum amount in emergency fund should be atleast 6 months worth of basic living expenses. But this is more of a general nature, the actual requirement depends up on your current financial situation.
Where Should You Keep the amount of Emergency Fund?
This money should be kept separate from general savings account. A substantial part of emergency fund should be invested in low risk fund such as Liquid Funds.
Before Investing In Other Asset Classes like Equities,
You must have an adequate amount of Emergency Fund before directly Investing in Equities or Equity Funds because liquidating equity at the time of Emergency will suffer you losses because of the higher volatility nature of equities. So, First have an Emergency Fund Planning after that Do your Investment Planning. 🙂
Hope this Helps!
Gurpreet S. Saluja
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Hi, I’am Managing Director at Gurpreet Saluja Financial Services where I help my investors choose right investment avenue to achieve their financial goals. I’m also a Value Investor and here I Write about Finance & Investing.