A thread on thinking about emergency funds -
What Exactly Is It?
It is the answer to unplanned events that lead you to look for money at the wrong places. Examples - medical emergency, job loss or any other unusual expense.
What Exactly Is It?
It is the answer to unplanned events that lead you to look for money at the wrong places. Examples - medical emergency, job loss or any other unusual expense.
How do you define emergency?
It must be an event that needs urgent attention.
It must be unplanned.
The consequences of not taking care of such an emergency could be much worse.
It must be an event that needs urgent attention.
It must be unplanned.
The consequences of not taking care of such an emergency could be much worse.
How should you think about the size of your emergency fund?
You must assess your current state of affairs to think about the size of your emergency fund. This evaluation must be done at different stages of life.
Ex - Upon getting married, having kids, or retiring.
You must assess your current state of affairs to think about the size of your emergency fund. This evaluation must be done at different stages of life.
Ex - Upon getting married, having kids, or retiring.
What factors to consider?
- Net-worth
- Sources of income
- Debt-equity ratio
- Number of dependents
- Your lifestyle
Industry recommendation - six months.
What should you do? We leave it to you to decide. Six months can pass in a woof.
- Net-worth
- Sources of income
- Debt-equity ratio
- Number of dependents
- Your lifestyle
Industry recommendation - six months.
What should you do? We leave it to you to decide. Six months can pass in a woof.
What Are The Advantages Of An Emergency Fund?
- You avoid making wrong financial decisions in panic
- You avoid resorting to expensive debt.
- You always know you have something to fall back to
- You avoid making wrong financial decisions in panic
- You avoid resorting to expensive debt.
- You always know you have something to fall back to
What parameters to consider while creating an emergency fund?
A. Safety of the investment - It must be held in the safest instrument possible.
B. Liquidity of the investment It must be highly liquid. Accessing the money should not take more than a day
A. Safety of the investment - It must be held in the safest instrument possible.
B. Liquidity of the investment It must be highly liquid. Accessing the money should not take more than a day
Strategies for creating an emergency fund -
- You could start small
- You could go all in
- You could consider It as an expenditure
- reduce other expenses
- get a part time job
- use your windfall gains
- You could start small
- You could go all in
- You could consider It as an expenditure
- reduce other expenses
- get a part time job
- use your windfall gains
We have a lot more on this available for our members on the community.
Join us to know where to put your funds, what are the other strategies our members are following and figure how could you get started by learning from those who have already done it.
turtlemoneycircle.com
Join us to know where to put your funds, what are the other strategies our members are following and figure how could you get started by learning from those who have already done it.
turtlemoneycircle.com
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