Jakarta, CNBC Indonesia – It is very important for us to have emergency fund savings. Because if not, there is a big possibility that you will have to go into debt for urgent needs.

As is known, many unexpected things often happen in life. Call it things like layoffs, business risks, damaged or lost gadgets, flat vehicle tires, and other problems or disasters that come uninvited.

That’s why it’s so important to have an emergency fund. Because when you don’t have this savings, you could give up your assets or personal items to sell or, what’s more, go into debt.

However, the question that often arises is how much is the ideal emergency fund savings that you should have? Here’s the review.

Emergency funds are calculated from expenses

The ideal amount of emergency fund savings should refer to your regular monthly expenses, more precisely, expenses for mandatory and basic things.

Mandatory expenses can be in the form of children’s school fees, debt repayments, or taxes. Meanwhile, the basic things are clothing, food and shelter.

By knowing the estimated expenses for our daily needs, you can calculate the ideal amount of emergency funds.

Adjust to the number of dependents

Once you know the amount of mandatory and basic expenses, then adjust the amount to the number of your dependents.

If you are single or have no dependents at all, then a total emergency fund equal to three times your mandatory expenses and monthly principal is sufficient.

However, if you already have dependents, provide at least six times the mandatory and necessary expenses.

Adjust again to professional risks

When you are an entrepreneur or freelancer, the risks in your profession are obviously high. This is because your income fluctuates, and the chance of losing income is also higher than that of employees.

People with professions like this should provide emergency funds equivalent to at least one year of mandatory and necessary expenses, to anticipate existing uncertainties.

[Gambas:Video CNBC]

(aak/aak)