Dealing With Financial Imbroglio

Being financially prepared for emergencies is highly essential

- Anagh Pal

When we think of an emergency the first thing that often comes to our mind is the sound of a siren as an ambulance speeds through the streets and then a patient being moved on a stretcher though sanitised hospital corridors, a team of doctors in white coats all hurrying together.

But even as we are aware that emergencies can strike us any moment we somewhere wish that it will not happen to us. But life often throws up shocks that we are least prepared to deal with. Even as we have no choice but to tackle the emotional consequences, the financial impact is often too severe to bear. For this reason it is very important to be financially ready for any sort of emergency and plan in advance.

“Financial risk management is an essential part of financial planning; different financial emergencies are managed differently,” said Renu Maheswari, Co-Founder and principal advisor, Finscholarz Wealth Managers.

This is why it is very crucial to create an emergency fund. “An emergency fund is a corpus, which can be used to meet expenses related to unforeseen events of life. The aim to have emergency money is to avoid financial hassles which may deviate you from saving for your longterm goals” says Hemant Beniwal, Director, Ark Financial Planners. An exigency fund is to be utilised in uncalled for situations like medical emergencies where health insurance is not adequate or leads to income emergencies like a job loss.