February 1, 2011 9:33 pm
My View on this
The Emergency Funds should not only be seen with risk of losing job there are other reasons for having a fund like this in place.
If you don’t have emergency fund ,create one just like SIP may be as a RD of fixed amount like you said in first point.
If you already have some SIP running ,don’t stop it for creating the Emergency Fund,rather make it as goal to create this emergency fund with specific time,say within 6 months. Like manish said its for your peace of mind. Just allocate extra fund to this cause until you have a comfortable amount in the emergency kitty.
Article relfects author views, btw I have not read the article. But you should think whether you need emergency fund or not. If you foresee risks in future then have contingency (including monetary part) in place.
Else go ahead and invest.
It would be great if you can put your views about what you said . Dont you think its important ?
Last few days i have been thinkinng about this, but not able to get a satisfying answer hence the question. But still we can have a few solutions just wanted to know forum members views
1. Continue SIPs & other compulsary expenses , while alot a fixed amount every month for emergency fund & most importantly dont touch untill extreme emergency comes.
2 Stop all investments & expenses , and put compele montly income to emergency funds (cash + FD + liquid/short term funds). Once funds worth 3-6 (i prefer 3 months) months are done. Then plan for other important things like , insurance & retirement planning & investment
what do you say manish ?
Emergency fund is actually for piece of mind where you know you will not have to run around and will not have to break things to fund any emergency , In case one looses a job, they generally break their FD’s , redeem mutual funds in worst case .. However if one has a provision of 6 months already , you can peacefully do other things..
Its on you how you look at it .
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