Read these two posts before proceeding further -
Factors Determining The Size Of Emergency Funds
We discussed in the earlier posts about circumstances when an emergency fund could be used. That list is more or less comprehensive.
A list of circumstances to suggest when should one not use emergency funds could be endless. There is no such list anywhere.
Use the parameters I will discuss below. Decide for yourself.
Let’s take a few examples to understand if the emergency funds could be used -
John’s car broke down - Not an emergency
Repairs at home - Not an emergency
Doctor consultation - Not an emergency
International Holiday - Hell, no
Upgrade to a nicer car because it’s discounted - NO NO NO
Unexpected travel due to a crisis - Yes
Loss of job - Yes
Prolonged medical leave - Yes
Use these three parameters to decide if you should dip into your emergency fund -
It must be urgent.
It must be unplanned.
The consequences could be much worse.
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Hi,
Good to see a simple and effective way of spreading personal finance awareness. I have read your posts and would like to recommend the following to be covered,
1. Practical/Workable strategies when it comes to investing for various goals that could be from creating an emergency corpus to retirement for all age groups. Eg, if someone is planning for their kids education, what are the avenues of investments for various time.periods. For kids marriage especially a girl child, gold is one of the components, what are the best practical strategies to buy gold?
2. Goal planner, investing avenues with advantages and disadvantages.
3. How much to invest versus what we save to invest - There is always a difference. Without loosing the motivation, how would anyone be able to invest what is available for various goals.
Rgds/Raj