What is an emergency fund and what is the ideal amount?

An emergency fund is like a helmet when riding a motorbike. Using it every day looks complicated. But when there was an accident, he was the one who saved your head.

Many feel that their lives are safe. Smooth pay, healthy, stable work. Until finally there is an event that is not on the calendar: the laptop stops, the motorbike stops working, or the office suddenly reduces employees.

Just then I panicked. Then where did he run? In debt. To friends, paylaters, loans. Dig a hole and close the hole.

So that doesn't happen, let's do surgery. Use human language, it's not complicated.

What is an emergency fund?

It's simple like this: special money that you prepare for "unlucky days".

Not to buy a new iPhone. Not for concert tickets. But to pay for sudden things that if you don't pay, your life could fall apart.

The difference with regular savings: savings have a purpose. There is no emergency fund. The goal is only one, namely to make you calm.

What is the ideal number? No need to worry, use this formula

The benchmark is your mandatory expenses every month. Not from salary. Write down first how much you spend a month on food, boarding, electricity, petrol, quota.

1. If you are still single, you don't have any dependents yet
Target 3x to 6x monthly expenses.

For example, in a month it's 3 million. This means that the ideal emergency fund is 9 million to 18 million.

This is just in case you get laid off. You have 3-6 months to find a new job without having to borrow money.

2. If you are married or are the backbone

Increase to 6x to 12x monthly expenses.

For example, household expenses are 7 million. That means prepare 42 million to 84 million.

There are more responsibilities. There are partners, children, installments. So the safety net must be thicker.

3. If you are a freelancer or your salary is uncertain

This is the biggest requirement: 12x monthly expenses.

Your income is unpredictable. This month is busy, the next 3 months will be quiet. A 12 month emergency fund is your oxygen so you can still breathe during job shortages.

Where do you store it so you don't have to worry about using it?

Rule 3: Safe, disbursed quickly, its value will not be lost by inflation.

1. Separate accountCreate a special account. Don't use m-banking, don't use an ATM card. It's okay to be a little complicated, so it won't be easily rubbed.

2. Money Market Mutual FundsThis is a favorite of many people. The interest is above ordinary savings, the disbursement only takes 1-2 working days. Safe because it is supervised by OJK.

3. Gold Yes, but not all of it. Maximum only 30%. The rest remains in the RDPU so it can be easily disbursed. The problem is that selling gold takes time.

Do not invest in stocks or crypto. The ups and downs are fierce. It's called an emergency fund, when you need it, it's all red. Disbanded.

Then how do you collect it from scratch?

You don't need to think that you have to get 20 million straight away. Starting from the first step: 1 million.

1. Force at the beginning of the month. Receive your salary, transfer it directly to your emergency account. Even if it's only 200 thousand. Just think of it as zakat for yourself in the future.

2. Take advantage of the surprise money. Get THR, bonuses, overtime money? Set aside at least 50% into an emergency fund before you think about making snacks.

3. Raise the flow of money coming in. Saving money from a mediocre salary takes a long time. If possible, increase your income.

Now looking for extra money you don't have to go to work anymore. Lu told me about the experience of being tricked into a loan that turned into money. Upload it on Zoyalink, every time someone watches it you get paid. The proceeds can be thrown directly into an emergency fund. It also melts quickly.

The bottom line...

An emergency fund is proof that you love yourself in the future.

Don't have one = your life is on the line. Having a little = calmer. Having enough = you can refuse toxic work because you're not afraid of starving.

It's never too late. Just start now from 100 thousand. The important thing is to start.

How many months have you accumulated emergency funds? Or just want to start? Try writing in the comments.