Plan for your emergencies

The importance of emergency funds has been stressed from time again. A typical popular financial advice suggests that one has to store 3-6 months worth of financial expenses.

More than the emergency fund, what’s important is the emergency plan. If do you have money is the first question, do you have access to that money an important one. So how do you plan for the emergencies? Here are some pointers.

• Have some instant cash at home: This exactly means, have some cash under your mattress. This means that you need access to cash right away for emergencies that do not give you time to stop at the cash machines. We are here talking about paper money. We are not referring to valuables like Gold which might be worth a million bucks but has no value during emergencies.
• Liquid Account: This is the next level of emergency fund. Do not lock all your money into deposits and investments. Have some liquid cash left for emergency and fast withdrawal.
• Credit: Credit cards could be a great savior during emergencies. But it’s not advisable to use them other than real bad emergencies. Make sure you don’t fall into credit card traps.
• Family and friends: Have a good network of family and friends whom you can resort to in case of emergencies. The thumb rule is if you have taken good care of the universe around you, the universe will return the favor when you are in need. Friends and family can provide powerful assistance, but if you don’t need it, don’t take it.

One needs to learn to reduce expenses in the time of emergencies. Proper money management is important during emergencies. You need learn to budget. Budget management is an integral part. You can take help of online money management in this regard.