Emergency fund: how much is really enough?

An emergency fund is money set aside for life surprises: a job loss, a medical bill, an urgent repair. It keeps you from taking expensive loans when things go wrong.

How much do you need?

A good target is three to six months of your essential expenses. If you spend twenty thousand a month on essentials, aim for sixty thousand to one point two lakh.

Where should you keep it?

Keep it somewhere safe and quick to access, like a savings account or a liquid fund. Do not lock it in stocks or long-term investments where the value can drop right when you need the cash.

Build it gradually. Even putting aside a small fixed amount each month will get you there. Once it is full, you can focus on growing your other investments with peace of mind.