A dedicated contingency fund is the need of the hour

Having a dedicated contingency fund to cater to uncertain events is your best bet in case of emergencies. But the biggest questions regarding the contingency funds are:

  • What should it look like?
  • How much money should it have?
  • Which instrument is best for a contingency fund?
  • How easy would it be to withdraw funds in case of an uncertainty?
Idle cash is not a plan to dodge uncertainties

Do you have a habit of financing uncertain events from the cash that has been left idle in your bank account or at home? Idle cash me be your sole solution to finance uncertainties, but in an age of aggressive spending patterns, one often gets lured to buy services or products, when spare cash is lying idle. This can lead to a dangerous situation in case of an uncertain event, an emergency, when you find that you do not have enough amount to finance your routine expenses during that uncertainty, because you spent the amount in buying the latest gadget.

Financing uncertainties from funds set for other goals is a terrible idea

Every person plans his/her future and start saving for his/her retirement or to finance children’s education/wedding. But the problem with such a saving is that people prematurely start withdrawing funds from future saving option and plan in need of money during emergencies and uncertainties. This does not only makes your saving plan go in a dump but risks your ability to take care of your future needs. Once a person starts withdrawing, he/she does that again, and the cycle goes on, leaving us with no financial security for future.


Does it happen that you plan something, and life bounces back with a situation you never expected? Surely a reply in affirmative would be the right answer for this question. Uncertain events and situations always come unannounced in lives. Uncertainties never give you time to plan, or wait for you to be sound enough to face them.  Uncertainties can be big or small, but one thing is for sure, no matter what the case is, you would need money to dodge the uncertain events. Be it a car breakdown, or a medical emergency, you would need funds to take care of the emergency.

The Unexpected

Loss of Job


Vehicle Repair


Sudden Illness


Household Repairs


Social Activities


Uncertainties would not wait for your kitty to be replenished again!!

One should have an investment in a liquid fund to serve as a contingency fund. A liquid fund is easy to manage and is just like a saving account from which money can be withdrawn at free will without any charges. A liquid fund offers much greater return than a regular saving account making it ideal to have spare funds in. Setting up an auto fund transfer from your saving account to your liquid fund till it has an amount equal to 3-6 month of your monthly expenses will serve the purpose of your contingency fund. Just make sure you do not start to fund family vacations or shopping from this fund, and you will be good to go.

Start today for a better tomorrow. Your children will be proud of you, just like you are of your father…

Be prepared, As uncertainties do not ring the bell before coming…