This is a critical rule that should be one of YOUR top 5 finance planning rules. Nothing has shown this more than the covid 19 pandemic and the impact it has on our financial lives.
Many people lost jobs or getting reduced salaries or suddenly had huge costs due to medical bills.. I have seen people hugely stressed on finance when they should have been focussed on settling their private lives.
The ONE way to help protect oneself is to have ONE year of emergency funds.
Take the example of the pandemic .. if one had the emergency fund it totally released a lot of pressure on getting time to search for a second job... cos it takes time in such a situation.
Lots of financial planners talk about a six months of emergency fund . But post this pandemic i would think that it makes sense to double this... it gives you much more downside protection.
Invest or keep this money in a liquid fund or a fixed deposit.
Downside protection makes sense.. simplefinancialsense.
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