Find out exactly how big your safety net should be, and how long it will take to get there at your current savings rate.
An emergency fund is money set aside for the things you cannot plan for: a job loss, a medical bill, an urgent repair. It is not an investment and it is not for a holiday. Its only job is to keep your life running for a few months if your income suddenly stops, so a bad month does not turn into debt.
Size it on your essential expenses only, rent, food, bills, EMIs and insurance, not your full spending. Then build it steadily; even a fixed amount every month gets you there faster than you think.
A common rule is three to six months of your essential monthly expenses. If your income is irregular or you are the sole earner, aim closer to six to twelve months. This calculator works out the exact amount from your expenses.
The things you must pay even with no income: rent, groceries, utilities, loan EMIs, insurance and transport. Leave out discretionary spending like eating out and shopping when sizing your emergency fund.
Somewhere safe and quick to access, such as a savings account or a liquid fund, not locked into investments you cannot withdraw quickly. The point is that it is there the moment you need it.
VThrive helps you see where your money goes and set aside a little every month. Built for urban India's subscription generation.