New Delhi, Oct. 12 -- An emergency fund is an important component of long-term financial planning that sets aside money for unexpected, but urgent situations. This "rainy-day" fund must be separate from your regular savings. You will also need to regularly assess and adjust the savings amount to ensure that extenuating circumstances (job loss, sudden car repair, expensive medical bills) do not affect your day-to-day finances.

Experts note that sound financial planning includes provision for an emergency fund that can help future-proof your finances, build financial flexibility, and help tide over unforeseen situations without the need for loans or borrowings.

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