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Financial Management 101? Start with Emergency Fund lah.

Let’s talk about Emergency Fund today. Stop all these invest into whatever to earn whatever super duper returns thoughts first. Are we actually prepared if we suddenly lose our monthly income today?

Some say they want to retire by 35. Usually the younger ones. Or the ones who think they are still young. They call it Financial Independence, Retire Early a.k.a as FIRE. Article about FIRE here for reading. A slightly older group says that they will retire at 60 so that they could still enjoy what they wanted to do as they are still fit enough. Which group are you? I am the group where I will work, save, preserve and invest. Here’s that article. Article about me here.

emergency fund
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However, if I were to just tell everyone this super important starting point, it is the below:

EMERGENCY FUND, do you already have it? Before 2020, most people would say that emergency fund should be 6 months of our current monthly pay. The reason is because in case we lost our jobs, then at least we could continue to pay all our bills for 6 months while we look for the next job. However, after 2020, I think everyone would suggest 12 months at minimum. So, I would also advise that everyone should have 12 months worth of emergency fund.

Calculation example: Monthly Salary x 12 = Emergency Fund

Remember, it is very scary to see a depleting account balance when we lose our job and is struggling to find a new one soon enough.

EMERGENCY FUND, is it SAFE? Let me direct. Every month, when we receive the pay and we withdraw the money and put into our wallet, we will feel RICH. Everything seems a good buy. Towards the end of the month when the wallet is already super thin, suddenly we are able to refrain from buying. This is why the emergency fund must NOT be saved or kept in a place which is easily accessible by you… Be serious yeah. Fixed Deposit can be a good option yeah.

EMERGENCY FUND, but… it’s emergency for me everyday. Sit down, write down all our expenses for the last 7 days. Ask ourselves this question for all the things.

i) Could I do without this?

ii) Could I find something cheaper?

iii) Could I delay buying this?

If the question is a Yes to ANY of these questions, then just start doing it the next week please. Many times, just these savings along would already help us tremendously.

EMERGENCY FUND, statistically speaking. 32% Malaysians could only cover 1 weeks’ expenses if they were retrenched (read here). The ‘strongest’ country in the world, 40% of Americans could not cover an emergency expenses of US$400 (read more) Meanwhile in the UK, 20% of Britons have no emergency savings. In the country many believe is a good example to follow: 2/3 of Singaporeans do have enough savings to maintain current lifestyle beyond 6 months if they lose their job (read here).


So, this issue of sufficient emergency savings continue to be a serious issue during emergency. Move forward quickly if you have a job and is able to start saving albeit slowly. That emergency fund will surely start building up before you need it. Hopefully we do not need it and this emergency fund becomes that extra money we suddenly found out we have in the future. Are you starting today? Happy saving yeah.

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Next suggested article: Let’s aim at having RM900,000 EPF savings, shall we?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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