Personal Finance
Emergency Fund
By Tan Kin Lian  •  September 8, 2011
Every person should build up an emergency fund of 6 months of earnings. If you earn $5,000 a month, the emergency fund should be $30,000. This fund should be invested in a liquid form, e.g. keep in the bank account, fixed deposit, money market fund or invested in short term bonds. The return is low, but it is more important to have the flexibility to withdraw the savings in an emergency, without any loss. This emergency fund is needed to meet your cash needs during unemployment, unexpected medical bills or other emergencies. If you have an emergency fund, you will not have to borrow money on your credit card and incur 24% in interest charges. This tip is important for young people. You should build up the emergency fund early. Do not spend all of your income away. Put aside savings for this emergency fund. It may mean that ...
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By Tan Kin Lian
Mr Tan Kin Lian (fomer NTUC Income CEO) started his insurance career in 1966 in a local life insurance company. He has also worked in various positions as a computer programmer, organisation and methods officer and consulting actuary. Mr Tan writes daily in his blog. The information in his blog is transparent and has an open approach.
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