Are you ready for the Rainy Season – Emergency Fund ?
How many of us try to take the umbrella in the Rainy Season. Do you think the rain did not come, when we have an umbrella ? Even if you do not do it during the rainy season, it is better to keep your Financial Planning in Advance.
Nowadays, there is lot of job opportunities and also there is a competition in getting employment. More than that, Changing a company to another for the employees are more.
Some one can get the promotion in their job, some have lost their jobs today. A challenging thing is how we deal our Financial life, when there is a job loss or loss of regular income.
The question is what we are going to do for our monthly income when it happens. Even if we are changing to new jobs or business, we have to prepare for our Temporary financial obligation. So, that is why we need to create an Emergency Fund.
Emergency Fund will help you on the time of any unexpected economic loss or temporary financial crisis. How can an Emergency Fund be planned ?
- Start a New (Separate) Savings account in a Bank
- Save 5-10 percent of your monthly salary on this above said account.
- This amount should not be taken for any other expenses (Except for the Emergency)
- Make sure that your Emergency Fund is 6-12 months as your monthly income. So, save the amount till it reaches.
This accumulated amount in your new savings account (Emergency Fund Account) will support you easily, while on unexpected job loss, Hard times in your business or in time of Emergency. Do not invest in a Risky based investment products in any given situation.
Saving for the Emergency Fund in a Savings account is helpful on Liquidity and you can easily withdraw to use it, if need.
Kindly share your views / comments with a smile 🙂