How to Build an Emergency Fund (Step-by-Step Guide for Beginners)

How to Build an Emergency Fund (Step-by-Step Guide for Beginners)

A few months ago, I was reviewing a client's portfolio when she said something that stopped me cold: "Ashutosh bhai, I have ₹4.5 lakh in mutual funds, but I had to borrow ₹30,000 from my sister last week because my mother had to be hospitalised suddenly." She had over four lakh rupees invested — and still had to borrow thirty thousand. How? Because every rupee was locked into ELSS funds with a 3-year lock-in. Not a single paisa was liquid. Not a single paisa was free to move when her family needed it most. This is one of the most painful ironies I encounter regularly in my financial practice. People are disciplined investors but completely unprepared for financial shocks. And according to a 2024 survey by the Reserve Bank of India, nearly 63% of Indian households have less than one month of expenses saved in a liquid form. That is not a statistic to read and scroll past. That is a crisis waiting to happen in crore of homes across India. I have been working in equity markets…