Building an Emergency Fund | Ankur Warikoo Hindi Video | Financial Planning for Beginners - Deepstash

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Building an Emergency Fund is the first thing to do when you start earning money.

Building an Emergency Fund | Ankur Warikoo Hindi Video | Financial Planning for Beginners

Building an Emergency Fund | Ankur Warikoo Hindi Video | Financial Planning for Beginners

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An emergency fund is a fund that is set aside separately from your usual expenses. So that if you have any emergency then you have ready cash to use and to spend.

Insurance is a form of emergency fund, but everything can not be insured (someone's job).So for such situations you keep aside funds as emergency funds.

As it is for "emergencies" it will only cover your needs. Amount spent on food, rent, electricity, EMI's etc. will be covered.

However other personal expenses will not be covered (The things which you want to buy but you don't actually need.)

It should be at least for 6 months or ideally 12 months.

  • Expenses for your monthly needs x 6 = 6 months
  • Expenses for your monthly needs x 12 = 12 months

  • Pause the investments
  • Pause personal expenses (On things that you want but actually don't need)
  • Add any lumpsum amount you get to the emergency fund.

Use 10+20+70 rule for keeping amount set aside as emergency fund.

  • 10% amount in cash (or debit card)
  • 20% amount savings bank A/c
  • 70% amount in liquid mutual fund 

The reason behind having more funds in liquid mutual fund is simply because it gives slightly b...

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