An emergency fund is a fund that would be a bailout function for us when no longer has a job. These funds can be cashed and stored in the type of investment.
Thus, how much money saved in an Emergency Fund?
For single person, not married, the best amount to have in emergency fund is 4 times of his monthly expenses. While for a couple or family with no kids, the best amount is 6 times of family monthly expenses. What if you have children?
If you have one kid, you should have at least 9 times of monthly expenses in your emergency fund account. If a family has more than two children, 12 times of the monthly expenses should be stored as emergency fund.
Before making a financial plan, we have to decide where the emergency fund will be stored. Is it in bank deposit product, or gold investment, mutual fund, or even simply opens another savings account? The important thing is wherever you would like to store your emergency fund, make sure that the investment product is low risk product and good liquidity. So you can easily access your fund and make a withdrawal whenever you need the money in case of emergency.
To manage your own emergency funds, set aside from your earnings. For example, people who earn USD1000 in one month, he could set aside a minimum of USD200 for emergency funds.
The emergency fund is not what percentage of salary you have, but how much money we have to achieve the target of an emergency fund.
[image taken from: infojkt.com]
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