Building An Emergency Fund in 2024 | Where to Save? | How Much Do You Need?
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- Опубліковано 13 гру 2023
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An emergency fund is a financial safety net that is essential for unexpected situations, such as natural disasters, job loss, or medical emergencies. It is designed to cover essential expenses when faced with unexpected financial challenges.
In Chennai, for example, where households often experience floods and waterlogging, an emergency fund would be crucial to cover the costs of damages to household appliances and property.
It's important to note that using a credit card as an alternative to an emergency fund is not advisable due to the high interest rates, making it difficult to escape a cycle of debt.
Investing in stocks or mutual funds is not suitable for emergencies, as these assets are intended for long-term goals and can be subject to market volatility. Gold, while an option, is also not ideal due to its volatility and the interest incurred when pledging it.
To determine how much to save for an emergency fund, one should consider their monthly expenses, including rent, food, insurance, school fees, and essential bills. Typically, it's recommended to have:
- 3 months of expenses for those without dependents
- 6 months for those with 1-2 dependents
- 12 months for those with 3-4 dependents
Health insurance is highlighted as even more important than an emergency fund, as it can cover substantial medical expenses, ensuring financial security during challenging times.
When creating an emergency fund, it should meet three key criteria: liquidity (accessible within hours to a day), safety, and stability. The recommended allocation is 30% in cash or a savings bank account and 70% in fixed deposits or liquid funds.
Fixed deposits offer a fixed return and can be broken with a penalty only on the interest, making them a secure option. Liquid funds, though offering flexibility, may not provide fixed returns and could have delays during weekends.
It's advisable to break the emergency fund into smaller chunks to withdraw only what is necessary without breaking the entire investment.
To build an emergency fund from scratch, it's recommended to:
- Pause other investments, like SIPs or stocks
- Cut back on luxury expenses
- Adjust your lifestyle if your income decreases
- Aim to save at least 10% of your income
- Set a target to reach your emergency fund goal, typically 6 months' worth of expenses
It's important to regularly replenish the fund after using it, revisit it annually, and not include it in your net worth calculations. Additionally, risky investments like stocks, mutual funds, or cryptocurrencies should never be considered a substitute for an emergency fund.
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How do you have 1.89 lakh subscribers only?!...you should atleast have 1.89 million...you are the best bro!
Because he doesn't speak in English.... I came to see but am leaving since I have no idea what he is saying😂
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Dheivameyyyyy useful information❤
Oru clear clarity kedachi irku
பயனுள்ள தகவல்களை தந்தமைக்கு நன்றி 🙏
Very informative and essential video for the current generation brother.
I have 60% of my CTC as an emergency fund deposited in Secure Bonds and FD. The interest I get from the bonds will be redirected to equity which is an added advantage.
It took 3 years for me to create my emergency fund and now I feel comfortable and confident since I also have term, health insurance to support me.
People working in volatile sectors like IT need to have all insurance and emergency funds. ✌️
Can you share some info on how did you choose the bonds. Thanks!!
@@juzdeepu I have considered various factors like bond type, maturity period, credit quality, it's liquidity demand and risk... Actually it's our personal choice to go...
Secured bonds- always beware of defaulted companies like DHFL, RHFL which had AAA(!!) ratings wherein people lost their total life savings and came to streets. The safest bonds are gilt and SGB issued by RBI. In SGB the appreciation after 8 years is fully tax free.
How you planned term insurance. From which insurance company is your term insurance.
@@hariniloganathan5893 I calculated in this way.. 10 times of CTC since I don't have any loans from my side. If you are having loans then pls dnt forget to take liability insurance separately and dnt mix it with term insurance.
And I did a little research in all AMC by comparing it's benefits, riders, claim ratio, office availability in my city and key aspects...
I personally feel Max, tata, hdfc, icici are good in these categories... You can do your own research too ✌️
Very nice explanation! One of the key and important point is to have good Health Insurance. Otherwise, this concept of an emergency fund will get wiped out with one hospital bill!
Can we use emergency fund , to invest in down trend market
Not at all.
Crisp and clear got idea … thanks Boosan
Thanks, Boosan. I was confused between debt funds and FDs. This video helped me a lot
Clear Explanation ❤
Am planning to build emergency fund for long time but this video helped to get some idea to do it immediately. Thanks for the practical video
Great and required info explained in simplest manner, Thanks
Such a good clarity on speech
Good Explanation sir, Thank you so much🙏
Thanks for clarifying brother.
Same am doing for the past years, but I need to withstand to keep money hold only for emergency. Good one🙏
Very useful information, Thank you brother
Bro mannual ah Intrinsic value eppadi calculate pandrathu❤ oru vedio poda try panunga bro❤
Yaru samy nee ivlo naal doubt ellathaium 13 mins la clear panita... Nandri bro
ஐயா வணக்கம் மிக அருமையான பதிவு வாழ்த்துக்கள் மிக்க மகிழ்ச்சி...நல்ல best Investment plan இருந்த சொல்லுங்க
Great work. Interacting with audience is one of the best way to grow and connect. Most of the viewers are new to financial savings/investment, etc and answering viewers question will make us engage more to you as you will speak from our situation. Keep it up 🎉
Point to point bro.well explained thanks bro
Very sharp and clear. ❤
Hi bro, please make a detailed explanatory video on how to select a mutual fund category wise, goal wise using parameters/ratios like Alpha, beta, Sharp ratio, standard deviation, etc. This would be easy for many who just began investing in mutual funds, your videos are clearer, fast and easily understandable, Great work bro
Clearly explained and covered all the things.. Thank you so much 😊.. Much appreciated ❤
Hi boosan thanks for the explanation, I personally started to save my emergency fund after seeing your video three months back thanks for your guidance, I am saving is uti liquid cash plan which gives you instant withdrawal facility below 50k even during the week end but I am yet to test it 😅, as you suggested yes seems fd is good I was in the wrong perseuption about 1% fine but seems it's on intrest, thanks for the clarification once I could save certain emergency fund then I will move them to FD. Appreciate your guidance
Thanks for the very clear information that even a uneducated can understand 👍
Good one. Very practical
Thanks for the information ☺️ bro ❤
Thank you bro.. useful...
Excellent detail explain 👍
Where can I find the FD Interest Rate of all Banks like you mentioned? Most reports don't have all small finance companies.
Thank for your information ❤😊
Nice information bro❤❤❤🎉 Thank you.
Thank you anna , very useful. 👁️🗨️👁️🗨️
Yar pa ne ivolo think pandra, super ji, good explanation 👏👏👏👏👍👍👍
Thank you so much bro for this video
Very good info. Really Eye opening info for FD return...
tq for your information😍😍😍
Hi Bro, Well explained 👏 thanks a lot, bro.
I have a query, because of trust issues people will not go for small financing banks, In other hand popular banks will give avg 6.5% interest and even some special interest for certain tenure. When I personally analyzed Savings Account interest and FD rates are similar for upto 2 years tenure. Currently I'm keeping EF only in Savings account with interest of 6.5%
So here what is best either Savings account or FD !!
Super super bro, I am very happy to this video, and useful information boosan.🎉🎉
Great eye opening video bro
stock lending and borrowing (slbm) pathi video pannuga bro
Awesome Bro.. Your inputs on this video has given me clear idea.. which I have missed in my 40yrs of age.. Thanks...Happy to be part of your subscriber list...
Well detailed explanation
Vera level bro usefull information tq bro❤❤❤
வணக்கம் சார் மல்டி கேப் பற்றி சொல்லுங்கள் எஸ்பிஐ மல்டி கேப் பண்டில் எஸ்ஐபி முதலீடு செய்யலாமா
Thank you so much Boosan, geneuinely this is by far the best that I have got searching through the internte, keep up this amazing work. Thanks again.
மிக தெளிவாக விளக்கம்🎉
Very nice!. All ur videos are awesome
Can we use Equity savings Fund / Arbitrage Funds instead of Liquid funds ?
Good information sir, 👍
Thank you
Precise and absolutely critical information shared in an easily understandable way to a lay man... me being a finance guy, what you said is 100% correct without a doubt.
For a 23 year old new invester with no loan, how much should be asset ratio in mutual funds, gold, FD, bond and stocks where I already have a emergency fund
Hello Busan.. People are following you because of your genuinity. So always keep in mind to suggest something... Or sponsers videos... Keep the good work. Thanks
Good advises
Romba arumaiyaana video bro. I have emergency funds for 12 months
That's great indeed, Having 12 months saved up is a very good cushion & safety to your financial foundation.
மிக்கநன்றி சகோ 👍🏻
Please like ur how to choose a index fund in nifty 50 do a video for Small cap, multu cap and ELSS fund❤
Very very useful info bro
Very useful tips brother thank you and happy new year god bless you ❤
Thank you! Happy New Year to you too brother ❤️
What about ALL WEATHER INVESTMENT smallcase as emergency fund
One thing is wrong consider gold also an emergency fund.
Any emergency situation occurs in a country gold only used as a international currency when we try to go to other safe countries.
Also in history gold can't depreciate remains constant forever whatever situation happens.
Thalaivare NRI epdi mutual funds la invest pannarathu .. already india la invest pannitu irunthavanga ipo NRI aaita antha india account ah enna pannarathu plz podunga thalaivare
Brother excellent explained i truly tell my mind words after watched this video's 200% more peoples it's supported this video no word's for me thanks of lots keep it up i will condifidant India will grow truly because your financial information, because every country backbones is financially plan you guide that ❤❤🎉
Thank you brother 😊😊
What if i have a loan emi, should i go for the loan repayment or prioritise the emergency fund ?
Always useful information bro.. u deserve more subscribers..
Hope ur valuable info reaches more PPL . Keep posting useful information.. thank u
Also buying gold coins also good option during emergency situations.gold Rates also increase n
Could you please tell us which insurance company you or anyone who availed the term insurance. It will be helpful.
Which is the best investment SSY or Nifty 50 index fund?
Can you plz compare?
Very informative video
Similar to Rahul jain UA-camr video. But very useful for Tamil audience. Thanks for making ❤
Super broo
Live investment video poduga brooo😊
நன்றி
Neenga oru finance encyclopaedia bro. Every video i see i feel my time is worth. Thanks for putting so much effort to educate us. Thanni kudichittu pesunga bro
Very true and out of experience...
If you have 3 lakh and if you plan for FD have 6 FDs with 50,000 each or 3 FDs with 1L so that you need to close the complete FD in case of emergency fund withdrawal.
Eg. If you have FD for 3L and your need is only 1L it is enough close only 2 50k FD or 1 1L FD and the rest remains.
Due to a medical emergency all my finance are drained and I need to start again....which is hard but the good part is I was able to cover expenses with emergency fund without loan.
Remember a Medical Emergency in family will show you your real financial status.
Fantastic brother ❤Keep going and growing 💗
thankyou sir
Excellent video
Well explanation bro 😎
Excellent Bro ultimate
i love all your videos so much ❤️❤️
I was thinking to save some emergency fund since years... But nothing happened... After seeing this video, have a new energy to start d process immediately... Thanks for alarming...
Bro unga channel join panna epudi mutual la invest panrathunu personal guidance kodupigala?
Thanks Bro. Your videos are extremely fruitful. Soon you will reach 1M Subscriber. Keep up the good work.
Gpay la gold buy panrathu safety ngala bro??
Bro star woman care insurance paathi oru video podunga
Thanks bro ❤
Vanakkam sago 😊❤
Bro can u explain about the health insurance
Bro how to balance emergency fund calculation vs inflation
Great video brother
Bro government job la irkavangaluku emergency fund theva padathunu nenaikuren.. avangaluku eatha investment plan podunga bro.. specially for government job peoples ku...
digital gold rent kodukurathu pathi sollunga bro
Bro daily return la epadii calculate pannurangaa in sip daily
Need intrinsic value video
Bro one question why tata steel suddenly down 2022 July - aug month you have any idea about this
Ji penny stocks pathi sollunga
Bro put video about NRI investment in india
Clear shoot ❤
Super video bro