BANKING AFFAIRS

Detailed explanation-1: -It is generally recommended that the size of an Emergency Fund is substantial enough to cover monthly expenses for a period of 6 to 9 months. As your monthly expenses are Rs. 70, 000, your Emergency Fund needs to be between Rs. 4.2 lakh and Rs.

Detailed explanation-2: -While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months’ worth of expenses.

Detailed explanation-3: -People in stable jobs are recommended to put away 3-6 months’ salary into their emergency fund, whereas people with lower job security are recommended to save 6-12 months’ salary. A stable income ensures a consistent and bigger emergency fund.

Detailed explanation-4: -As a general rule of thumb, many financial experts recommend setting aside 3-6 months’ worth of living expenses. So if you generally spend $2, 000 per month on rent, utilities, food, gas, healthcare, and other necessities, you should try to save between $6, 000 and $12, 000.

Detailed explanation-5: -Across the 15 largest U.S. metro areas, these are the average amounts for six months’ worth of expenses: Single adult with no children, $12, 660. Single adult with one child, $25, 274. Two adults with no children, $18, 554.