I am a salaried employee. I want to create an emergency fund for me. How should I start and where to keep this amount? I want to invest 10-15% from my salary towards this monthly. My target is to create a sum of 75000 in 6-8 months.
The amount of money to be put in Emergency Fund depends from person to person. If a person is married and both are working then he/she can set aside 3 months expenditure as Emergency Fund. Ideally they say you have to put 6 months expenditure in your Emergency.
Ways to build the emergency fund:
- Calculate the total expenditure of a month and multiply it by x(x can be 3/6/9/12 depending upon your requirement)
- Depending on your salary, calculate how much you will able to save per month which needs to be put in this fund
- Transfer this saved amount into different SB Account till you achieve your goal. And most important, do not touch this amount unless there is an emergency