- Your target
- ₹1,80,000₹1.8 lakh
- Still to save
- ₹1,80,000
At ₹5,000 a month, you’ll get there in 36 months.
What an emergency fund is for
It’s money you keep for things you can’t plan: a job loss, a hospital bill your insurance doesn’t cover, a family emergency that means flying home tomorrow. Without it, those land on a credit card or a loan, and a bad month becomes a bad year.
How much is enough
Count essentials only: rent, groceries, bills, EMIs, insurance and money you send home. Leave out eating out and shopping, since you’d cut those first in a crisis. Then pick how many months to cover:
- 3 months if your job is stable, you have no dependants, and family could help in a pinch.
- 6 months for most people. It’s the usual advice for a reason.
- 9 to 12 months if you freelance, run a business, have dependants or work in an industry that’s laying people off.
Example: essentials of ₹30,000 a month and six months of cover means ₹1.8 lakh. Saving ₹10,000 a month, you’d get there in 18 months.
Where to keep it
Somewhere safe and quick to reach, but not in your spending account, where it blends into everything else. A separate savings account, a sweep-in FD or a liquid fund all work. Don’t keep it in stocks. Emergencies tend to come when markets are down.
Getting there faster
Move the money the day your salary lands, before you can spend it. If six months feels far away, aim for one month first. Then three. The salary planner sets aside 10% of your salary for this by default.