What should be the Approach of saving money for unexpected financial hardship and purchasing insurance (ex. car, renters, house, etc.) in your own life?

What should be the Approach of saving money for unexpected financial hardship and purchasing insurance (ex. car, renters, house, etc.) in your own life?

Tips for Financially Preparing for Unexpected Events

•       Prepare for the Unexpected.

•       Start With an Emergency Fund.

•       Obtain Life Insurance.

•       Get Adequate Insurance Coverage in Other Areas.

•       Plan for Natural Disasters.

•       Create a Backup Budget.

•       Purchasing insurance (ex. car, renters, house, etc.)

 

What is your approach to saving money for unexpected financial hardships?

 

I have term life insurance for 1 Crore and I pay 450 Rs/month.

I have an emergency fund saved in debt funds and in a savings account. I log where my money goes every month and I have been doing that for the last 3 years so I know how much on an average I spend per month.

I like to have about 12 months of my expenses as an emergency fund but I currently have about 6 months. I use this emergency fund in case of unexpected expenses.

I may not cover all the risks or unexpected expenses in fact risk is something that is left after thinking about all the risks. We plan but we will not be able to cover everything. I have a plan for retirement and child education, in fact, I have a plan for what will I do if I have surplus cash or if there is cash crunch.

Things may not go as planned but some process makes my life a bit better.

 

Thank you

 

Author:

Dhruv Dev Dubey

BE, MBA-Human Resource

Business Head -3D India Group