How big it should be
Many planners suggest three to six months of essential expenses. Essential means rent or EMI, food, utilities, transport and medicines. If your job income is less steady, aim for the higher end.
Build it from a monthly amount
Set a monthly amount for the fund, then move it on salary day. If essential expenses are ₹30,000 a month and you want three months, the target is ₹90,000. At ₹5,000 a month, that takes 18 months.
Keep it easy to reach but separate
Keep the fund in a savings account you do not use for daily spending, so it is available but not tempting. Avoid locking it into investments you cannot withdraw quickly.
- Target three to six months of essentials
- Build it with a fixed monthly amount
- Keep it separate from daily spending
- Use the fund only for real emergencies
Questions people ask
Where should I keep an emergency fund?
A savings account you can reach quickly is a common choice. For other options, speak to a qualified financial advisor.
What counts as an emergency?
An unexpected cost you cannot cover from this month's plan, such as urgent medical treatment or a sudden job loss.
How do I track the fund?
Record the monthly amount in budgetbaba as savings, and compare the total with your target each month.