Planning for your contingency fund is an important aspect of a smooth financial journey.
What is Contingency Planning?
- Planning for rainy days
- Keeping aside money for an unknown and uncertain event: such as medical emergencies, loss of a job or any other eventuality for which you haven’t planned for.
- If not taken care of such events may derail one’s finances and lead to a financial crisis and hence you need to plan well in advance.
How much should Contingency Reserve be maintained?
6 months To 12 months of expenses
What kind of expenses should be covered in Contingency Planning?
|
S.No. |
Particulars |
Monthly |
Annual |
|
|
Household Expenses |
||||
| 1 | Grocery & Toiletaries | |||
| 2 | House – Rent, Maintenance, Repair | |||
| 3 | Conveyance, Fuel & Maintenance | |||
| 4 | Medicines / Doctor / Healthcare | |||
| 5 | Electricity / Water / Labour / AMCs | |||
| 6 | Mobile / Telephone / Internet | |||
| Sub-total of Household Expenses | 0 | 0 | ||
|
Lifestyle Expenses |
||||
| 1 | Clothes & Accessories | |||
| 2 | Shopping, Gifts, Whitegoods, Gadgets | |||
| 3 | Dining / Movies / Sports | |||
| 4 | Personal Care / Others | |||
| 5 | Advisors-Financial, Fitness etc | |||
| 6 | Travel & Annual Vacations | |||
| Lifestyle Expenses | 0 | 0 | ||
|
Dependent Expenses |
||||
| 1 | Children’s Schooling/College | |||
| 2 | Contribution to Parents, Siblings etc | |||
| Dependent Expenses | 0 | 0 | ||
|
Insurance Premiums |
||||
| 1 | Life Insurance (Term) | |||
| 2 | General Insurance | |||
| Premiums | 0 | 0 | ||
|
Loan Servicing |
||||
| 1 | Home Loan EMIs | |||
| 2 | Vehicle Loan EMIs | |||
| 3 | Personal Loan EMIs | |||
| Loan Servicing | 0 | 0 | ||
| Net Outflows | 0 | 0 | ||
