Dr. Chandrakanth Bhat can be reached on whatsapp for free consultation on +971 50 1484595

Why should you have an emergency or contingency fund?

If you have failed to create one, then you run the risk of breaking your plans you have created to reach other life goals. The emergency situation that may arise in your life may ruin your meticulously created financial plan.

So how much of emergency fund should one accumulate ?

A simple thumb rule to follow would be – keep an amount equal to sum total of A+B+C , where

A= Two years living expenses
B = All planned one time expenses for next two years.
C= A provision for unforeseen expenses .

Should I Idle my emergency funds in a bank SB account ?

No, park this amount in such instrument which are liquid at all times and its valuation should not be volatile .

You can park your emergency funds in Bank FD(not locked in), debt funds of mutual funds like liquid funds or low duration fund.

Do not park the emergency funds in instruments like long term locked in Bank FD , Ulip plans, ELSS funds , properties, shares and equity mutual funds

Creation of an emergency fund is a dynamic and ongoing process . Don’t wait till you fully build this fund to start working on plans for other life goals. You can simultaneously start working on other plans like your insurance , retirement corpus building etc. Have a clear budget allocation for each of these.

NRI Money Clinic is a YouTube channel created by Dr. Chandrakantha Bhat , an investment consultant and financial planner in Dubai . It aims to spread financial literacy and educate on money matters for resident and non resident Indians . The channel discusses subjects like Fixed Deposits , Taxation , Mutual Funds , Insurance , Specific Issues pertaining to NRI community and every other investment opportunity.

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Links to my previous videos:till now

Budget 2020: Impact on NRI’s (Part 2) Who and When Will They Get Affected?: https://youtu.be/Hq5iPSEWcAI

Budget 2020: Will NRI’s Overseas Income Be Taxed Now? (Part 1) NRI Money Clinic: https://youtu.be/uXM9AKo9HrM

Role of a Financial Planner: https://www.youtube.com/watch?v=KZPnnn3NqyM

What is the meaning of money? : https://youtu.be/AAxQ4ywScos

6 steps to generate good returns on your investments – https://youtu.be/AAxQ4ywScos

Why you should watch this channel – https://youtu.be/rgsHfw41W_8

Don’t Buy a Life Insurance Policy Until You Watch This! https://youtu.be/q0adm_CKvew

Why are your mutual funds not showing the returns?https://youtu.be/28TfBq_OGx8

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