Imagine you wake up in the morning and your parents want you to leave their house. You don’t have a job and little to no savings. How will you survive?
Story of Prince
I have a friend who lived in Bihar(India); his name was Prince. He falls in love with a beautiful skinny girl. They enjoyed their life until one day, someone informed Prince’s father that he is in the relationship(Hurray!).
Prince expected that his father would accept the relationship. Everything would be smooth like butter.
Things didn’t turn out as expected because his girlfriend was from a poor family (If you go to any rural area, you will find that people are pretty conservative and care too much about their social status).
So, the whole relationship was turned into Rich VS Poor. So far situation was in hand, and he was finding some solution to persuade his father.
Suddenly one day, Prince’s father isolated him in a room so he couldn’t meet his girl. What Prince did next was irony.
You can’t even imagine it!
He escaped somehow, took his girl and left the city within a day. He arrived in New Delhi, where I live.
Now, Imagine yourself in a completely new city with your girlfriend. The city is full of strangers except for a few friends; you have to find food, shelter, clothes and a job.
How will you deal with this situation?
The same situation was faced by Prince, but the emergency fund saved his ass!
You can never imagine what could go wrong.
Just like Prince, your situation your life can also turn upside down within a matter of weeks. That’s why it’s essential to have an emergency fund so you can survive in worse conditions.
You can open two different accounts in different banks. You can use one like a savings account and another as an emergency fund account.
You can make the fixed deposit also whatever works for you. Only remember you have to keep savings and emergency funds separate.
Most people treat their emergency fund as savings. They use it when they find they don’t have enough savings to buy something.
Never do that…
Treat your emergency fund like a bunker. You use the bunker only when there is a nuclear war to save yourself from radiation. Otherwise, you stay in a typical house.
How much should I save?
On average, you can save a total of 4 months of savings. For example, if your salary is $100/m, your total fund could be $400.
We have reached the end. Hopefully, you have learned something