New Delhi, April 14 -- A "rainy day" fund or emergency fund is crucial aspect when planning your fiscal goals alongside the asset allocations, investments and retirement fund. Simply put, it is money set aside for sudden and unexpected situations, for example car repair, urgent house expenses, a medical bill or job loss.

The existence of your emergency fund can help tide over sudden needs without a loan, credit card or borrowing from friends. More than money, it gives you freedom to handle a crisis without putting immediate stress on your day-to-day finances.

The aim of an emergency fund is to cover unexpected expenses that could hit your daily needs or financial goals i.e. breaking your fixed deposits, pausing SIPs, or liquidating inve...