What are Emergency funds and why do you need to have one?
Emergency funds are money stashed away for unforeseen situations like job loss, medical emergencies, house repair etc.
Life is full of unexpected situations so it is better to be prepared for such difficult times rather than repenting later.
How much Emergency fund should I have?
It totally depends on your expenses. Having a minimum of 6 to 12 months of expenses is recommended and this can reduce your stress level during difficult times.
Where to put these funds?
Open a separate bank account.
Save two months of expense in this account.
Keep 15 days expense amount as cash for safety .
Park the rest of the amount in a liquid mutual fund where you can redeem it a couple of days.
Do you have an emergency fund?
If the answer is yes I would be glad to know how you have saved your emergency fund and where. If the answer is No, then don't think twice. Act now.
Would you suggest any liquid funds based on your research done so far ?