All of us know that we need to build an emergency fund so that we do not suffer during tough times. But seldom we create such funds. Robin Sharma in his book 5 AM Club says, ‘No idea works until you do the work’.
Wishing to have an emergency fund and not acting up on it or or not taking steps towards building it, will not yield the desired results. A wish will remain a wish, without action.
As a measure to get ready for recession, job losses or any other unforeseen situations, start building such fund NOW. Else, you may fall into a debt trap. You may take loans to manage your expenses when your regular income stops.
Treat this as savings for future. Many people have a mindset that savings is an expense. No, it is not. Savings is not an expense, but a necessity.
Also, you must look at ways to reduce your housing loan, which primarily eats up 60 to 70 percent of your income. This will help you to free up some space and save more to build an emergency fund.
It is not that hard; believe me you can do it over a period.