“I don’t understand stock markets, but wait eagerly to read other articles on your website. Everywhere on your site, you advocate that one should make an Emergency Fund. As a novice, how should I start making this emergency fund?
In this post, I would try to help the lady create an Emergency Fund in 5 easy steps.
Emergency Fund, as the name suggests is there to handle emergencies. A job loss, illness, accidents, etc. An emergency fund should have sufficient funds to cover your expenses in case you loose your job, meet with an accident or have some unplanned expenditures?
|Remember God in good times and Emergency Funds in bad times|
You can take following approach to create your own emergency fund –
And it is my personal experience that if you don’t have to think about it, savings are much easier.
Dead Monk’s Advice: Don’t risk your emergency fund by going after higher returns.
Many of your ‘well-wishers’ and so called financial experts will tell you that you can easily earn more than 7% if you are ready to invest in MFs, stocks etc. But beware. Do not listen to them.
Read the following scenario…
As of now, you might feel that you are not in some kind of emergency situation…
|Timeline for creating an Emergency Fund – (Click To Enlarge)|