🎯 Goal: Know the emergency fund should cover 3–6 months of basic spending and compute the target from monthly spending.
An emergency fund is a reserve for lost income/incidents. It should cover 3–6 months of basic spending. Size = monthly spending × number of months.
Let’s explore
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Purpose: stay steady when income is suddenly lost or an incident hits.
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Fund size = Monthly spending × months (3–6).
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Keep it separate, easy to access, not mixed with risky investments.
Practice activity
🧮 Spending 3,000,000d/month, want a 4-month fund — how much?
Worked example: Spending 3,000,000d/month. A 4-month fund = 3,000,000 × 4 = 12,000,000d. With it, even 4 months without income is manageable without borrowing.
Quick quiz
1. How to build an emergency fund?
→ Set aside part of income monthly
2. Fund size is computed by?
→ Monthly spending × months
3. Spending 3M/month, 4-month fund?
→ 12,000,000d
4. The emergency fund should be?
→ Separate, easy to access
5. The main purpose of the fund?
→ Stay steady on income loss/incidents
🎯 Real-life mission
Calculate your emergency fund size (monthly spending × months).