Emergency Fund

I was enjoying the   post Idli Sambar Sunday Slumber when suddenly the door bell screamed.  Too lazy to get out of my sofa cum  bed jyada; I just listened to the lady of the house talking to one of our neighbours. The synopsis of the conversation was that she has to pay to the maid and she did not have any cash in hand. So my wife gave the interest free loan to the neighbour with sweet assurance of returning it along with the sugar that she borrowed since she was any way here.

I was a little puzzled as we live in an apartment complex where you come to know if your neighbours are out of town because the newspaper keeps on accumulating at the door step due to non collection. The little financial devil in the detail in me started to interrogate the Mrs. On why the neighbours did not have even 700/- Rs at home for a planned expense like the salary of the maid.

To this my super smart financially 10 times savvy than me wife informed me that this has been a regular phenomenon and the padosan has been asking for various monetary as well as commodity ( onions, sugar, bag of flour) on a regular basis, if it was not for the maid then it was for the tutor to the kids or the gas vendor. It was clear to me that the neighbour has not been managing her home finances.

The surprising fact is that the family is very well to do and the husband works for a top MNC and wife is a part time consultant to a large recruitment firm. So earnings should not be an issue, it simply seems to be a case that they do not understand the concept of emergency funds.

While you need to have some money in easily cashable form like Fixed Deposit or Liquid Mutual Funds some cash at home is always a very good idea, not just to pay the maid on time but also for other situations that can happen in any households and you may need some cash.

My wife always keeps around 5000/- Rs in different denominations at home for any eventuality. We will talk more about emergency fund in a future posting.

Thanks for reading do leave a comment.