My response to the @Indiaunited Contest - Theme: Planning for an emergency fund
Life can throw us surprises at any point of time. Emergencies do not come knocking on the door; they come all of a sudden and for that one has to be well prepared. When we are very young we do not realize the importance of it, but as life progresses and you face different situations of life, you learn all of these things.
When me and hubby were back in India, our salaries were just enough to manage our expenses, and do a little saving, so it was always tough to take care of any emergency sudden expenses that would come up. To tackle that from the beginning, we had made it a point to save 10% of our income in emergency fund, which would be separate from our regular monthly savings. So, in this way, when there would be any sudden additional expenses, we were kind of prepared to take care of it. It would happen sometimes that the expense would be higher than our savings. Especially when it would come to medicals. In such a case, we had no choice but to remove money from our regular savings. But then still the extra emergency fund would save us to a great extent.
Whenever there are additional unplanned expenses and we have to dig from our savings or if the entire emergency fund is used up, then for the next few months we would crunch up on all our leisure expenses and save additional as much as we could to cover up.
Everything in life cannot be planned so it is best to prepare yourself for these unknown circumstances which can knock our door at any point of time in life. No matter how much ever money we earn, it never feels enough, and expenses keep going up, so it is very important to plan. Remove the savings and then whatever is remaining money, expenses should be planned around that and it should not be the other way around.
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