As any true professional would suggest, it is wise to make hay when the Sun shines. And in the absence of its warmth, it is quite resourceful to park some of that hard-earned dough aside for certain rainy days.
For working class heroes, you can start an Emergency Fund with just Rs. 1000 a month. Wait for time and compound interest to weave their magic and before you know it, you will have a good amount of savings pooled into a liquid fund, available to be withdrawn within 30 minutes of your requirement. But what might you need such money for, you ask? Here are a few reasons to get the ball rolling –
The global economy and the market in general are prone to fluctuations. Business ups and downs are bound to happen but having an Emergency Fund set up with at least 4-6 months of your living expense, including your rent and EMIs, can provide you a safe harbor to rest while you look for your next big break in your career. Your Emergency Fund will take care of your EMIs and any other kind of commitments you might have during your job switch period.
Among the invaluable assets you possess, your health is of the utmost importance. Without a well-balanced mind and body, you can’t even perform simple tasks like preparing some breakfast. In the off chance that you fall ill, the last thing you would want to worry about is your finances. Emergency Fund can give you access to your savings in a jiffy to pay for your medical procedures and bills, especially those not covered by your health insurance, so you don’t have to shell out money from your long-term investments.
These days, owning a piece of land and making it a home to live in is a feat in itself. Having a roof over your head is one way to make your family feel secure, but its maintenance is a cost you will have to bear. Perhaps the fans are making too much noise, or the coolant in your air conditioner isn’t doing a swell job, or the rain may be seeping through the ceiling in parts of your house, regardless of the reason, having a little extra money stashed away for such repairs can come in handy.
One of the biggest perks of living the big city life is having your own car to drive around. Nothing can beat the thrill of a long drive and if the traffic is too loud, you can roll up your windows and turn up your favourite radio station. With that said, you are that much more likely to bump into someone else’s car or even get a scratch from a road-raging teenager on his 2-stroke bike. When such incidents occur, its natural to get angry at the whole ordeal but it’s better to have some money parked in your Emergency Fund to take care of the tinkering.
And even if you have a handle on these situations, life might just throw you a few curve balls from time to time. You might lose your phone charger on a flight, you might need to buy a neat tie before an important meeting or your salary might even be delayed by a few days. That’s why we advise investing your money as a precautionary measure to avoid unwarranted expenses.