Why Emergency Funds Matter
An emergency fund protects long-term investments from being liquidated during crises.
How Much to Keep
- Salaried with stable income: 6 months of expenses
- Business owners/freelancers: 9-12 months
Where to Keep It
- Savings account for immediate liquidity
- Liquid funds for better efficiency
- Do not lock emergency corpus in volatile assets
Common Mistake
Investing all surplus into equity and relying on credit cards for emergencies creates long-term wealth damage.