Why emergency fund is necessary for proper financial planning, how to save money for it?

New Delhi. When it comes to proper financial planning, the role of savings in it is very important. Correct financial planning is the one that includes an emergency fund as well. It is also necessary to put some part of your salary in the emergency fund every month. If you suddenly need money now, then this fund can be useful for you. Also, it can save you from being buried under the burden of debt.

However, there are many people who think of creating an emergency fund but are unable to save money for it. Today we are telling you some such ways, with the help of which you can include emergency fund in your financial planning and for this you can easily save money.

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Benefits of creating an emergency fund
When you start saving money by making an emergency fund, then you start avoiding unnecessary expenses. Due to this, your expenditure on non-essential things starts decreasing. At the same time, during the financial crisis, the emergency fund also keeps your stress level low. Because when you are in financial crisis, it affects your mental health badly. It saves you from the burden of debt and helps you to solve any kind of financial problems easily.

How to create emergency fund?
To create an emergency fund, you should choose such an option from which you can easily withdraw money at the time of need. The simplest solution for this is to open a savings account in a bank that offers good interest rates. You can open a savings account in the bank to keep your emergency fund. Although, you get less return on the amount deposited in this as compared to other investment options, but from this you can withdraw money whenever needed.

Save money like this
When you open a savings account in the bank for emergency fund, then keep depositing some part of it every month as soon as you get salary. You can keep this account without linking it to internet banking or UPI, which will help you to keep the money in this account safe. Apart from this, you can also deposit income from any other source like bonus or incentive in this account.

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