The cushion
Building an emergency fund
One surprise — a hospital visit, a phone that dies, a month between jobs — shouldn’t push you into a loan you’ll regret. An emergency fund is the cushion that absorbs life’s shocks so you don’t have to borrow at the worst possible time.
How much should you save?
Aim for three to six months of your usual spending — not your income, your spending. If your essential costs are ₹30,000 a month, a starter goal is ₹90,000 and a fuller cushion is closer to ₹1,80,000. If that feels huge, start with one month and build from there.
Where to keep it
An emergency fund’s job is to be available, not to earn the highest return. Keep it somewhere safe and quick to reach — a separate savings account or a liquid or sweep-in fixed deposit. The point is that it’s there the day you need it, not locked away or at risk.
Build it without feeling it
Add a small fixed amount every month alongside your other savings. Windfalls like a bonus, a tax refund or festival cash are perfect for topping it up. Once it’s full, you can redirect that monthly amount into investing.
An emergency fund turns a crisis into an inconvenience.