In the journey toward financial well-being, one of the most overlooked yet essential steps is creating an emergency fund. Whether you’re a salaried professional, business owner, or freelancer, life can throw unexpected situations your way—medical emergencies, job loss, urgent home repairs, or sudden travel needs. An emergency fund is your financial shield during such unplanned events.
What is an Emergency Fund?
An emergency fund is a dedicated reserve of money set aside to cover unexpected expenses. It’s not meant for vacations or luxury purchases but strictly for unforeseen and urgent financial needs.
Why is it Important?
Reduces Financial Stress: Knowing you have a backup gives mental peace.
Avoids High-Interest Debt: Instead of relying on credit cards or personal loans, you can use your fund.
Supports Job Loss or Income Gaps: Gives you breathing space to find new opportunities.
Ensures Investment Continuity: Keeps your long-term investments intact without premature withdrawals.
How Much Should You Save?
Financial experts recommend keeping at least 3 to 6 months of your monthly expenses in an emergency fund. If you are self-employed or have irregular income, aim for 6 to 12 months.
Where Should You Keep Your Emergency Fund?
Savings Account with quick access
Liquid Mutual Funds – offering better returns than a regular bank account and high liquidity
Sweep-in Fixed Deposits – combines flexibility and interest
How to Build Your Emergency Fund?
Start Small, Be Consistent: Begin by saving a small percentage every month.
Automate Savings: Set up an SIP (Systematic Investment Plan) in a liquid fund.
Prioritize: Make emergency saving your first financial goal.
Avoid Using It Casually: Treat it strictly for emergencies only.
Real-life Example:
Mr. Dinesh, a tea shop owner from a small town, used to deposit daily into a traditional RD through an agent. But when an emergency struck, accessing funds became difficult. Through Sahare Wealth’s guidance, he set up a digital SIP in a liquid fund. Now, he’s better prepared for any unforeseen situation, with direct access to his money.
Final Thoughts:
Life is unpredictable, but your finances don’t have to be. Building an emergency fund is not just good financial planning—it’s essential. At Sahare Wealth, we help you design a tailor-made emergency strategy suited to your income, goals, and risk profile.
Start today and take your first step toward financial freedom and peace of mind.
Connect With Us to Build Your Emergency Fund Plan