Business News Desk – Emergency fund is the amount that comes in handy in difficult times. Nowadays people do future planning, but do not think seriously about emergency fund. But in true sense, difficult times can come in front of anyone at any time. In such a situation, if you do not have an emergency fund, then the savings that secure your future will end and you may have to beg in front of others for help. So apply the 67:33 formula on your income for just two years, after that you will easily have so much money to deal with difficult times that neither you will have to touch your savings quickly nor you will need to borrow money from anyone.
Know what is the formula
To apply the 67:33 formula, you have to divide your income into two parts. These parts will be in the ratio of 67:33. Out of this, you have to save 33% of the money and invest it and with its help create an emergency fund for yourself and your family. You can spend the rest of the amount as per your convenience. For example, if you earn Rs 50,000 a month, then you have to divide your salary into parts of Rs 33,500 and Rs 16,500. Out of this, you have to take out Rs 16,500 as savings and use Rs 33,500 as per your convenience.
How much should an emergency fund be?
Financial expert Deepti Bhargava says that usually it is said to create an emergency fund for six months, but you should create an emergency fund for at least 1 year. This fund should be equal to your monthly expenses for one year. If your monthly household expenditure is Rs 33 thousand, then you should have Rs 3,96,000 i.e. about Rs 4 lakh as an emergency fund. The more money you have in difficult times, the better it will be for you.
Emergency fund will be created in 2 years
Suppose your salary is 50,000 out of which if you save Rs 16,500 every month at the rate of 33 percent every month for two years continuously, then in two years you will have Rs 3,96,000 deposited. But if you invest this monthly savings amount in a scheme, then you can create a fund even more than this in two years. For this, you will have to start a two-year SIP or RD from the savings amount. If you run a SIP of Rs 16,500 for two years and you get an average return of 12 percent, then you will get Rs 53,513 as interest on an investment of Rs 3,96,000. In this way, you can save Rs 4,49,513. If you start an RD in SBI for two years, then in 2 years you will get Rs 29,135 as interest at the rate of 6.8 percent. In this way, you can save Rs 4,25,135 in two years.
Try these methods to save money in less than 2 years
Before saving money at the beginning of the job, focus more on creating an emergency fund for yourself and save as much money as possible. If you get any incentive during the job or any kind of bonus money comes into your account, then instead of spending it, put it in the emergency fund. This will help you accumulate your fund even faster.
