Generic advice like “keep six months of expenses” ignores your actual burn. Monthly burn should include rent, loan EMIs you must keep paying, groceries, utilities, insurance premiums amortised monthly, and a medical buffer — not restaurant spending or vacations.

FinCoHolic’s Emergency Fund calculator lets you enter those essentials and choose a target in months (often three to twelve for dual-income households, longer for single earners or volatile income). The output is a rupee target you can park in liquid or overnight options, not long-lock products.

Keep the emergency corpus separate from SIPs and trading capital. Mixing them leads to selling investments in a panic when a job gap or medical bill arrives.

Replenish the fund after you use it. The goal is stability, not maximising yield on every rupee at the cost of lock-in.