Banking & savings
Emergency fund
A cash buffer of 3-6 months of expenses set aside for job loss, medical shocks, or repairs.
An emergency fund is money kept safe and accessible purely for genuine emergencies.
Aim for 3 to 6 months of essential expenses, more if your income is irregular.
It stops a crisis from forcing you to break investments at a loss or take a costly loan. Build it before you start investing aggressively.
For example
If your monthly essentials are ₹40,000, target an emergency fund of ₹1.2L to ₹2.4L in a savings account or liquid fund.