We all invest in the various asset classes keeping our future goals insight with a tentative time horizon. However, many investors miss out on one crucial parameter i.e. contingency requirement. You may need money at any time in case such an emergency arises due to:
- Health reasons / Medical treatment
- Accident
- Death
- Job loss / Business loss
- Natural calamities
- Unplanned / unexpected expenditures
Therefore, a proper provision is required to maintain adequate funds for emergency needs to pump required liquidity just in time. A separate account can be created for this purpose preferably jointly with one of the family members on an 'E or S' operating basis or have access to operate online as & when required without any hassle. Mote importantly, your spouse or family member must know about it and how to operate it.
The funds can be parked either with a savings bank or a liquid mutual fund. The quantum of amount varies from person to person and depends on your lifestyle, generally, it should be 6 months of your monthly expenses at least.
One can not wait for their relatives or friends to support them financially in case of any emergency, everyone is financially stressed nowadays. It's better to make our own provisions and this will be like your insurance protection.
Never ever ignore contingency funds, again if utilized due to some casualty, try to fill it back ASAP.
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