An emergency fund or reserve is the need of the hour these days. We live in coronavirus times where anything can happen to anyone.
Hence, a good financial plan must include an emergency corpus to move towards a stable and secured life.
It also gives peace of mind to the family and savings fund is used for the right purpose at the right time.
An emergency fund should include living expenses of atleast a year. Hence, slowly saving an amount can lead to a higher fund.
Health insurance can help you cover only health-related urgencies. So, ensure to create a corpus requirement that will meet your expenses.
You can keep one month’s living expenses in savings account always and ensure to keep the remaining amount in the form of fixed deposits or LIC policies or long-term investment plans.
By Sahana Iyer