BANKING GENERAL KNOWLEDGE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
2 months worth of expenses
|
|
|
6 months worth of expenses
|
|
|
Cash in whatever stocks you have to pay for an emergency
|
|
|
As a neighbor for a loan if needed
|
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: -It means that you will be more prepared for a sudden expense and that you can handle small financial hits more smoothly. Unemployment, illness, and family emergencies can come up with no warning, and having emergency savings can help ease those stressful situations.
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: -Regardless, 19 months is a long time to save a month’s worth of expenses. Do the math, and you’ll realize that saving six months’ worth of expenses will take you nearly 10 years.