It is extremely crucial for everyone to have an emergency corpus. Life is very unpredictable and one can never predict what unforeseen incident may strike at what time. If you are currently living without an emergency corpus, you need to start planning and build up this fund at the earliest. Take a look at this article where we list some very handy tips that would help you to create your emergency corpus and utilise it properly.
- Spend less, save more
You need to start off by curbing your expenses and taking a serious step towards saving more money each month. You may need to make changes to your lifestyle habits. For instance, if you go for meals outside five times a month, cut it down to two or three times. Make a conscious attempt to save and you will be on your way to saving money and creating a corpus.
- Make a budget and stick to it
It would be of great help to you if you made a budget and stuck to it. Make a budget and write down your income, your expected expenses (rent, bills, health care costs, etc) and the unexpected expenses (leaky roof, medical emergency expenses, etc). Try your best to stick to the budget. A tip here would be to start slowly and make a moderate monthly budget. If the budget is too stringent and doesn’t allow any room for splurges, you may fail to stick to it.
- Parking the fund
You need to park the fund in a safe place. It is not safe to keep it lying idle in your savings bank account. You may end up spending it. It isn’t very safe to invest this money in a risky investment platform such as a mutual fund either as you may end up losing it all. It is a good idea to keep it parked in a fixed deposit or a recurring deposit to ensure it stays safe and secured.
- Keep your health insured
Another important thing to do is buy a good health insurance plan. This is a crucial thing to do because healthcare is very expensive these days. If you get admitted to the hospital, you can end up spending all your savings in just one go. To prevent this from happening, invest in a good health insurance plan and stay fit while protecting your saved money as well.
- Keep monitoring
Don’t just create an emergency corpus and forget about it. You need to keep monitoring the fund. If you have invested the money, keep checking on it to ensure it is safe and growing. If you have left it in a bank account, see if you can park it in a more valuable place. You need to keep visiting your fund to make it work for you.
Follow these simple steps and you will be able to build up and maintain an emergency corpus with ease.