ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The thumb rule when saving for an emergency fund is to have at least three to six months’ worth of expenses put aside. When deciding how often you want to contribute and how much, it’s important to consider your monthly expenses and lifestyle.

Detailed explanation-2: -Creating and maintaining a savings plan for unexpected expenses can help keep your finances on track when accidents and emergencies put a strain on your budget.

Detailed explanation-3: -How much should you save? 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-4: -Tap into your emergency fund. If you have enough cash on hand in your emergency fund, you can use some or all of it. Use a credit card. Borrow cash from family or friends. Ask for an advance at work. Get a personal loan. Pick up a short-term side gig. 28-Jun-2022

Detailed explanation-5: -Prepare ahead of time. Think about how you’d handle the cost of events like hiring extra staff, replacing a key piece of equipment, or taking advantage of a new opportunity. Check your finances. Make sure you’re up to date with payments received. Get assistance.