What it is
An emergency fund is money set aside only for real emergencies — a job loss, a medical bill, an urgent repair. It sits in a savings or liquid account where you can grab it fast.
Why it matters
Without it, every surprise becomes credit-card debt. With it, life's curveballs become inconveniences instead of crises. It's the single biggest boost to your financial peace of mind.
How to use it
- 01
Add up your essentials: rent, food, utilities, transport, EMIs.
- 02
Multiply by 3 if you're salaried, 6 if you freelance.
- 03
Start with a ₹10,000 buffer, then build it up monthly.
- 04
Keep it in a high-yield savings or liquid mutual fund.
In real life
If your essentials cost ₹25,000/month, aim for ₹75,000–₹1,50,000 set aside. Boring money — but it'll save you the day life gets weird.