In the face of ever escalating household debt and economic challenges, families in India are re-analysing their financial goals and objectives.<\/p>\n
The focus has now shifted on building robust emergency funds with a renewed emphasis on planning things efficiently. Recent data underlines the significance of this financial preparedness.<\/p>\n
According to a recent report<\/a> <\/a>by Motilal Oswal Financial Services, household debt in India has surged to 43.5% of GDP in the first half of FY25, up from 37.9% in FY23. This increase is attributed to a serious rise in non-housing personal loans<\/a>, which now constitute 32.3% of GDP.<\/p>\n Further, household net financial savings (HHNFS) have shown a modest recovery, rising to 7.3% of GDP in H1FY25 from a 47-year low of 5.0% in FY23.<\/p>\n Financial experts and market veterans recommend that individuals should aim to save between three to six months worth of essential expenses. For example, a family with monthly expenditure of \u20b950,000 should consider setting aside \u20b91.5 lakhs to \u20b93 lakhs as an emergency corpus.<\/p>\n Still, it is also crucial to acknowledge the fact that the exact amount of saving for emergency fund creation should be tailored to individual circumstances, upon proper consultation with a certified financial advisor<\/a>.<\/p>\n Strategies to build your emergency fund:<\/strong><\/p>\n Furthermore, complementing your emergency fund with a reasonable health insurance<\/a> policy from a reputable company is also a prudent thing to consider.<\/p>\n As medical emergencies are a common cause of financial strain. Therefore, while formulating a new emergency fund you should take into consideration the following economic indicators as well:<\/p>\n\n