Why is it Important to have six-month reserve fund

Ms. India Universe (2018), Shreya Krishnan speaks about the importance of the six-month reserve fund.  How each of us, especially women – who are often left out of the sphere of personal finance, should therefore – should have these assets and securities to fall back on.

The video talks about women, finance and technology. The guest Shreya Krishnan, was taught financial responsibility by her mother. As a mature married woman, she still carries this ideology wherever she goes. Shreya Krishnan talks about the importance of budgeting and planning your monthly income to cover expenses, savings and for indulgence. As someone who is working in insurance, she understands the importance of the six- month reserve fund. She also highlights women’s savviness in money, technology and financial management.

Working towards financial independence requires financial planning and proper income management. Financial management includes tracking expenses, budgeting and setting up an emergency fund for rainy days. The emergency fund is normally called a six- month reserve fund. An emergency fund should be a priority like the long term investment.

From an early age, Shreya mother taught her the importance of financial planning. She allocates a certain percentage to expenditure, savings and indulgence. Most people prioritize long term savings only, however, six- month reserve fund is necessary for emergencies. The emergency fund is a financial backup in case of a sudden loss of income or any financial crisis. She also advises saving money for indulgence such as holidays or just doing something nice for yourself.

She observed that when it comes to technical things, women are normally assumed to lack knowledge. However, women are no longer oblivious to technology, finance, etc. Therefore the same marketing tactics used to attract male customers should also be used to women because women are educated in many departments.

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