• How to build an Emergency Fund?
The ongoing coronavirus pandemic has hit India’s economy hard, activating a credit crunch for many. The tragedy has made many people realise the prominence of having an emergency fund. A contingency fund or an emergency fund is a stated amount set aside for emergencies that rise unanticipated. These can be medical emergencies, temporary job loss, pay cut or unanticipated travel due to family emergencies.

• What is an Emergency Fund?
An emergency or contingency fund, as the name suggests, aids individual and their family to financially face a medical scare, inevitable household repairs, abrupt loss of job or salary or pay cut or something that influences the community at large such as wars, social unrest or a pandemic like the current one.

• Importance of an Emergency Fund
Life is full of unanticipated situations good and bad. Henceforth, apart from other things, individual essential to be prepared for it financially. While they can plan for some foreseeable expenses, an emergency fund can aid they manage all unplanned expenses proficiently. The current pandemic is an example of one such unintended expense.
People with an emergency fund are in a much better position to achieve this lockdown than those who don’t. During financially problematic times, an emergency fund can aid they stay afloat without having to rely on credit cards or loans. If they already have loans that they are paying off, then an emergency fund can aid them avoid borrowing more.
• How to set an Emergency Fund?
For starters, the first step is to assessment how much money is essential to meet any sort of emergency. Each individual has different financial needs. Hence, the amount will vary for all. Before calculating the amount of the emergency fund, it is significant to calculate the minimum amount one requirements to get through the inevitable monthly expenses. This should contain house rent, insurance premiums, loan instalments, utility bills, groceries, etc.
An emergency fund should be sufficient to fund the monthly expenses for up to 6-8 months, or up to a year if an individual fear a job loss or feel things are indefinite on the financial front.

• How much Emergency Fund do you need?
Each individual has diverse financial needs. Every individual has a sole combination of lifestyle, dependents, income, and unavoidable expenses. Henceforth, the figure will be diverse for all. Before calculating the amount of the emergency fund individual need, it is vital to calculate the minimum amount they need to get through the inevitable monthly expenses. This should contain house rent, loan instalments, utility bills, etc. Ensure that they don’t contain unnecessary expenses that movies, travel, etc. in this amount. Once they know their monthly expense, try to create a cash fund that can aid they survive three-six months without any income. Given the existing situation, most people will agree that six months of basic living expenses stashed as an emergency fund is a must at all times to manage exigencies competently.

• How to manage an Emergency Fund?
Just saving up some money is not enough. Just as you strategize to save for the goal, you need to have a plan for its deployment and use. There are three crucial aspects to look at when deploying an emergency fund: security, accessibility, and liquidity.
Security: The money in this fund is to aid individual through a tough situation; hence, they cannot deploy it anywhere where there is risk of capital corrosion in the short term. Equity/ equity-based mutual funds or any other option with a proportionally high risk should be evaded.
Accessibility: Most emergencies attack fast. If individual do not have timely access to their emergency fund, it is useless. Ensure that the funds are appropriately accessible so that individual can take care of instantaneous expenses.
Liquidity: Liquidity denotes to how quickly individual investments can be converted to cash. Long-term deposits, bonds, Provident Fund (PF), National Savings Certificate (NSC), etc. do not work as they are either irredeemable before maturity or have an upper limit on withdrawals.
Keeping these aspects in mind, individual can try the 15:15:70 method for organising their emergency fund.
Cash: Keep 15% of the money in liquid cash. Keeping too much cash is not recommended from a safety point of view. Furthermore, over a period of time, idle cash loses its value due to inflation and increasing cost of living.
Bank Deposits: Another 15% could be held in own bank account securely. It takes away the risk of spending the money and the funds will earn a small interest on the savings bank account. Cumulatively, this 30% of their emergency fund offers quick access for immediate use and for smaller emergencies.
Investment: The balance 70% of the fund can be capitalised either in short-term deposits or liquid mutual funds. Both these debt instruments have minimal hazard, and they are highly liquid, too. Their investments can be liquidated through the fund house or bank’s app or a physical request, and the funds will reflect back into their account within a day or two.

• How to build an Emergency Fund?
Putting aside a couple of lakhs may seem like a huge task, but with a little planning, financial discretion, and a step-by-step approach, individual can easily get there. Here are some quick tips on how to get the ball rolling:
Set a monthly goal: Once individual decide the amount that works best for them, stagger their goal into smaller palatable monthly deposits. This puts them into the habit of saving and makes the task a lot less daunting.
Use a separate account: This should be parked with the principle of out of sight, out of mind – this way individual are suspect to get tempted to spend that money. Perfectly, park the money in short term debt funds known as liquid mutual funds.
Pay your future self-first: Just as individual strategize for other financial goals such as planning for retirement or saving up for a home, put aside a small amount every month as soon as they receive their salary/ draw their business income. If probable, automate the transfer so that their savings are taken care of on a priority.
Trim your expenses: Reigning in on the non-essential expenses stated earlier will allow individual to get to their saving goals quicker, and maybe even surge the monthly allocation. Individual don’t have to go absolutely cold turkey, but just prioritize their expenses. Instead of eating out on a weekly basis, cut it down to one or two outings a month, watch movies at home, limit non-discretionary online shopping, etc.
Reallocate lump sum receivables: Have individual received a bonus at work, got a tax refund, or an envelope from an aunt on their birthday? Set aside a small amount to enjoy themselves, and assign the rest to their emergency fund. Adding any windfall gains can really aid fast-track their goals.
The tragedy has made many people realise that the prominence of having an emergency fund. A contingency fund or an emergency fund is a stated amount set aside for emergencies that rise unanticipated. These can be medical emergencies, temporary job loss, pay cut or unanticipated travel due to family emergencies, etc. Just like a personal emergency fund, your business emergency fund will give you the confidence you need when crap hits the fan. It’s necessary to have cash tucked away that will keep the doors open for a few months while you do what it takes to bring in more business and more profits. But for that they need to provide a proper project report so that they can get an emergency fund for their start up but first of all they need to know How to make project report for loan and according to that they get full DPR information, subsidy DPR or they even get PMEGP Project, CMEGP Project or they even get Project Report format for Trading, Project Report format for Manufacturing, Project Report format for Agriculture, Project Report format for Service. Or they can get Online Project Report for Bank Loan or they can get Online CMA Report, Online DPR for project report. And for subsidy project report they can get subsidy DPR too with the help of loanDPR.com


LoanDPR.com is an online platform for generating Project Reports to get bank loans and even project reports for subsidy. Whether you are a New Start-up Company or an Established Company, user can create Project Report required for bank loan and also required CMA reports. It’s User Friendly and Do it by Yourself Platform, created for End Users, Entrepreneurs, Business Owners, Chartered Accountants, Tax Consultants, Finance Professionals, Bank Employees etc. You can generate Business Project Report for Bank Loan and also prepaid Project Report in just 10 minutes by using user interface provided by LoanDPR.com
For any assistance or more information feel free to contact us at contact@LoanDPR.com or at WhatsApp no. +91-8459973683 or +91-8459941735