🏦 Emergency Fund 101: How Much Should You Really Save?

Here’s how to set up your emergency fund the right way 👇

Step 1: Calculate Your Monthly Expenses

List all essential monthly costs:

• Rent or EMI

• Groceries & utilities

• Transportation

• Insurance premiums

• School fees, if applicable

Add them up.

💡 Example: If your monthly expenses = ₹50,000 → your emergency fund should cover ₹1.5 – ₹3 lakh (3–6 months of expenses).

Step 2: Set a Realistic Target

Start small, aim big.

If ₹3 lakh feels overwhelming, begin with ₹10,000. The key is to start — then automate savings monthly until you hit your goal.

Finwise automatically tracks your progress, showing how close you are to your target fund.

Step 3: Choose Where to Keep It

Your emergency fund should be:
✅ Safe — no market risk
✅ Liquid — easily accessible
✅ Separate — not mixed with daily expenses

💰 Best Places to Park Your Emergency Fund (India):

💡 Finwise can automatically suggest the best mix of savings + liquid funds based on your comfort and timeline.

Step 4: Automate Monthly Transfers

Set up an auto-transfer of 10–15% of your salary every month to your emergency fund.

Finwise allows you to:

• Schedule automated transfers

• Set milestones (e.g., 50% goal achieved)

• Receive alerts when you reach targets

Automation builds consistency — and consistency builds security.

Step 5: Keep It Separate

Your emergency fund is not for vacations, gadgets, or gifts.
Keep it in a separate account or category inside Finwise — so you’re not tempted to use it impulsively.

Step 6: Refill Whenever You Use It

If you dip into your emergency fund, make it a rule to replenish it within 3 months.

Finwise tracks withdrawals and reminds you to rebuild your balance automatically.

⚠️ V. Common Mistakes to Avoid

Most people think they have an emergency fund — but here’s where they go wrong 👇

1. Keeping It in Cash or Current Account

Inflation silently eats away at value. Always store it where you earn at least 4–6% returns.

2. Investing It in Risky Assets

Your emergency fund is not for equity or crypto — the goal is stability, not growth.

3. Not Updating Fund Size

If your expenses increase, your emergency fund must too. Review it every 6 months.

4. Using It for Non-Emergencies

New phone ≠ emergency. Stick to genuine needs.

5. No Automation

Manually saving “when possible” doesn’t work. Automate it once in Finwise — then forget it.

⚙️ VI. How Finwise Helps You Build Your Emergency Fund Effortlessly

Building an emergency fund can feel overwhelming — but Finwise makes it simple, smart, and automated.

Here’s how 👇

🔗 1. Set Your Target

Input your monthly expense amount → Finwise calculates your ideal emergency fund instantly.

📊 2. Track & Automate

The app auto-transfers your savings into a secure emergency fund category each month.

💡 3. Smart Suggestions

Finwise analyses your cash flow and recommends how much extra you can safely save without impacting bills.

🔔 4. Goal Reminders

You’ll get alerts when you’re close to your milestone — or if your fund falls short after withdrawals.

🔒 5. Secure & RBI-Regulated

Your linked accounts are encrypted and regulated under India’s Account Aggregator framework, ensuring full safety.

💬 “I never realised I needed an emergency fund until Finwise made it visual — now I feel secure for the first time.” — Aarav, 28, Bangalore

💡 VII. Real-Life Example

Example: Priya, 30, Marketing Executive from Delhi

• Monthly expenses: ₹60,000

• Target: ₹1.8 lakh (3 months’ worth)

She used Finwise to automate ₹10,000/month into a liquid fund-based goal.
In 18 months, she reached ₹1.8 lakh — without stress, tracking, or missed savings.

When her company delayed salary for two months, she managed everything without taking a loan.

That’s financial peace of mind — powered by preparation.

🏁 VIII. Conclusion + Call-to-Action

Emergencies are unpredictable — but your financial security doesn’t have to be.

Building an emergency fund in India is your first step towards financial independence and peace of mind.
Start small, stay consistent, and let automation make it effortless.

💜 Use Finwise to build your first emergency fund — and protect your future from the unexpected.

🌐 External Links

• Reserve Bank of India – Household Finance Report

• SEBI Investor Education Portal