Include rent, EMIs, utilities, groceries, insurance
Each dependent adds 0.5 months to the buffer
What is an Emergency Fund?
An emergency fund is a dedicated savings buffer to cover unexpected expenses like job loss, medical emergencies, or urgent repairs — without going into debt or liquidating investments.
How much should I save?
The recommended amount varies by job stability: 3 months for stable government/corporate jobs, 6 months for moderate-risk roles, and 12 months for freelancers or business owners. Dependents add to the requirement.
Where should I keep my emergency fund?
Keep it in highly liquid, low-risk instruments: high-yield savings accounts, liquid mutual funds, or short-term FDs. Avoid locking it up in PPF, stocks, or other illiquid investments.
Should I include EMIs in monthly expenses?
Yes. Your monthly expense figure should include rent, EMIs, utilities, groceries, insurance premiums, and any recurring fixed costs — everything you must pay even if you lose your income.