Simridhi Makhija, founder of The Speak Fest, a Bengaluru-based startup, said having ₹20-30 lakh saved can provide a financial cushion during events such as job loss, medical emergencies or unexpected family expenses. Her point was that savings can provide security by reducing the immediate pressure to arrange money when income is disrupted.
But ₹20-30 lakh is not a universal benchmark for financial security. The amount required depends on monthly expenses, income stability, debt and dependants.
How much should you actually save?
Financial planners generally look at an emergency fund in terms of months of essential expenses, rather than a fixed rupee amount.
For example, if essential expenses are ₹1 lakh a month, six months would mean an emergency corpus of ₹6 lakh. For someone spending ₹2 lakh a month, the same six-month cushion would be ₹12 lakh.
People with irregular income or greater financial responsibilities may need a larger buffer.
What experts say
Financial planners generally recommend calculating an emergency fund based on essential monthly expenses rather than targeting a fixed amount. A common benchmark is three to six months of expenses, although people with irregular income or higher financial commitments may need a larger cushion.
The money should also remain readily accessible. The purpose of an emergency fund is to meet unexpected expenses or bridge a period of income disruption without having to sell long-term investments or take on expensive debt.
Savings are only one part of the picture
A large savings balance does not automatically mean financial security. Health and life insurance, manageable debt and investments for long-term goals also matter.
The right question, therefore, may not be “Do I have ₹20 lakh saved?” but “If my income stopped today, how long could my accessible savings cover my essential expenses?”
That calculation offers a more personalised measure of financial preparedness than a fixed savings target.
