Anyone, whether employed or in business, may suddenly need money. Let's explore how much emergency fund you should have based on your work culture and needs...

Emergency Fund Rule India: Whether employed or in business, anyone can suddenly need money. Investing habits help meet these needs. However, financial experts advise everyone to create an emergency fund based on their needs. Because the risk of job loss and business fluctuations always looms. 

When income stops, but expenses continue, your emergency fund proves to be a very helpful companion. Let's explore how much emergency fund you should have based on your work culture and needs...

Keep these things in mind before creating an emergency fund

The amount of money needed for an emergency fund isn't the same for everyone. It depends on your income, your stable job or business, and how many family members you're responsible for.

Having a small emergency fund can lead to difficulties in difficult times. Therefore, it's important to consider these factors before creating an emergency fund.  

3 and 6-month emergency fund

An emergency fund equivalent to three months' worth of expenses should be created by single individuals and those who are not burdened with debt or EMIs. Such individuals can create a three-month emergency fund. This fund can easily cover almost all their needs.  

Those who live with family need more security. Therefore, it's best to have an emergency fund equivalent to approximately six months' worth of expenses to cover responsibilities like rent or EMIs, groceries, utility bills, school fees, insurance, and medical needs. 

12-month emergency fund

If you're not employed and your business isn't stable, you should build an emergency fund that lasts at least 9 to 12 months. Because your family is completely dependent on you and your income isn't fixed, you could be in trouble without an emergency fund.