New Delhi, July 25 -- An emergency fund is an important component of long-term financial planning that sets aside money for those unexpected, but urgent situations. It is key to separate your emergency fund from your regular savings and regularly assess and adjust the savings as needed to ensure that no sudden circumstances (such as job loss, sudden car repair, expensive medical bills) can affect your day-to-day finances.

The aim of your emergency fund is to help tide over these situations without the need for loans or borrowings and build enough financial flexibility to face a crisis.

In order to calculate your minimum emergency fund amount, tax experts advise that investors with a stable job start by assessing their expenditure for a ...