← Money Basics: Budget and Emergency Fund · Lesson 2 of 3
Your emergency fund
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An emergency fund is money kept aside only for surprises: a job loss, a medical bill not covered by insurance, an urgent repair.
- Aim for at least 6 months of household expenses (3 months as a first step).
- Keep it safe and easy to withdraw, for example a savings account, a sweep-in fixed deposit or a liquid fund.
- Do not mix it with long-term investments.
Without it, people often break long-term investments or take costly credit-card or app loans in a crisis. Build it slowly: even ₹1,000 a month adds up.
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