Emergency Fund: How Much Money Should You Save? Check The 3-6-9 Rule

Buildi g
a
eme ge cy
fu d
is
o e
of
the
most
impo ta t
steps
i
fi a cial
pla i g
as
it
helps
i dividuals
deal
with
u expected
expe ses
without
dis upti g
thei
lo g-te m
i vestme ts
o
savi gs.
Medical
eme ge cies,
job
loss,
vehicle
epai s
o
othe
u fo esee
expe ses
ca
put
p essu e
o
fi a ces,
maki g
a
dedicated
eme ge cy
co pus
esse tial.

A
simple
guideli e
to
dete mi e
the
ideal
eme ge cy
fu d
is
the
3-6-9
ule.
U de
this
ule,
i dividuals
with
a
stable
sala y
a d
o
depe de ts
should
mai tai
savi gs
equal
to
at
least
th ee
mo ths
of
esse tial
expe ses.

Those
with
a
stable
i come
but
fi a cial
depe de ts
should
ta get
six
mo ths’
wo th
of
expe ses.
I dividuals
with
i egula
i come,
such
as
f eela ce s
o
co t act
wo ke s,
should
aim
fo
i e
mo ths
of
expe ses,
while
those
with
i egula
i come
a d
depe de ts
a e
advised
to
mai tai
a
12-mo th
eme ge cy
fu d.

The
amou t
equi ed
ca
be
calculated
by
fi st
listi g
all
esse tial
mo thly
expe ses,
i cludi g
g oce ies,
utility
bills,
e t
o
home
loa
EMIs,
i su a ce
p emiums,
school
fees,
t a spo tatio
costs,
i te et
bills
a d
othe
u avoidable
payme ts.
Multiply
the
total
mo thly
expe ses
by
th ee,
six,
i e
o
12
mo ths,
depe di g
o
you
fi a cial
situatio .
Fo
i sta ce,
if
mo thly
expe ses
a e
Rs
25,000,
a
six-mo th
eme ge cy
fu d
would
be
Rs
1.5
lakh.

Fi a cial
expe ts
suggest
eviewi g
mo thly
expe ses
pe iodically,
as
cha ges
i
i come,
loa s
o
lifestyle
ca
alte
the
equi ed
eme ge cy
co pus.
I dividuals
ca
sta t
with
a
smalle
ta get
a d
g adually
build
the
fu d
th ough
egula
mo thly
co t ibutio s.
Automati g
t a sfe s
th ough
SIPs,
fixed
deposits
o
dedicated
savi gs
accou ts
ca
help
mai tai
co siste cy.

Additio al
i come
such
as
Bo uses,
Tax
efu ds
o
f eela ce
ea i gs
ca
also
be
di ected
towa ds
the
eme ge cy
fu d
u til
the
ta get
is
achieved.
Expe ts
also
ecomme d
avoidi g
high- isk
i vestme ts
such
as
equities
o
Pe y
Stocks
fo
eme ge cy
savi gs
because
thei
value
ca
fluctuate
sig ifica tly.
I stead,
the
co pus
should
be
i vested
i
low- isk
a d
easily
accessible
i st ume ts.

Also
Read
:& bsp;Sma t
Bo owi g
Guide:
How
To
Ma age
EMIs,
C edit
Ca ds
A d
Loa s
Respo sibly

A ou d
30
to
40
pe
ce t
of
the
eme ge cy
fu d
ca
be
kept
i
savi gs
accou ts,
sweep-i
fixed
deposits
o
auto-sweep
accou ts
fo
immediate
access,
while
the
emai i g
60
to
70
pe
ce t
may
be
i vested
i
liquid
o
ove ight
Mutual
Fu ds
that
offe
elatively
bette
etu s
while
mai tai i g
liquidity.

The
3-6-9
ule
se ves
as
a
p actical
f amewo k
athe
tha
a
fixed
fo mula.
The
ideal
eme ge cy
fu d
should
be
based
o
a
i dividual’s
fi a cial
espo sibilities,
i come
stability
a d
mo thly
expe ses,
with
egula
eviews
e su i g
that
the
co pus
emai s
adequate
as
ci cumsta ces
cha ge.

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