WHAT IS EMERGENCY OR CONTINGENCY FUND?
Often, there is an urgent requirement of money – for example, a health crisis, hospitalisation, or something less serious but nonetheless equally expensive. To meet these needs, you either need to borrow or have your own kitty kept aside. Financial planners suggest building an emergency fund, which is a stash of money kept aside to cover such situations.
WHAT IS THE BENEFIT OF HAVING AN EMERGENCY KITTY READY?
When a financial emergency arises suddenly, one would have to take a loan or borrow from family or friends, which could be embarrassing at times. Having an emergency kitty ready saves you from doing this. It also saves you from breaking into your investments such as equity mutual funds, shares or longterm investment products that have been done with an objective to meet a particular long-term goal. Being prepared…
