New Delhi, Oct. 20 -- An emergency fund should be based on essential household expenses and how long it could take to replace lost income, rather than salary alone. While six months of expenses may be sufficient for some households, sole earners, people supporting dependent parents and professionals with variable incomes may need a larger financial cushion.

Sandeep Jethwani, co-founder of Dezerv, recommends that dual-income salaried households with stable jobs and adequate health insurance maintain at least six months of expenses as an emergency fund. Sole earners, people supporting parents and employees in sectors facing layoffs should consider nine months, while business owners, freelancers and professionals with variable incomes may n...