Planning for an emergency
If you needed Rs 50,000 to a lakh right now, do you know where to get it from? Let’s make a New Year resolution. Let’s do some contingency planning.
This is money available at a call i.e. at a moment’s notice. If you do not have this provision you need to seriously rethink your money management. This applies to anyone irrespective of whether you are earning or not. There could not have been a more appropriate time to talk about this subject. The subject of “contingency planning” is probably one of the most ignored areas of life.
The reason it is ignored is because, as the name suggests, it is based on contingent events and such contingencies do not happen every now and then. But when they strike, the impact can be severe and the repercussions may last a lifetime. Who knows better than the people of Mumbai who in the recent past have had a bitter tryst with this harsh reality.
Let’s understand contingencies better. Everyone knows that contingencies are basically emergencies like accidents or similar mishaps. But there is far more than what is known. Contingencies include events like accidents but in totality contingencies tend to include all type of events where you are in need of immediate cash. It need not be just bad or sad events but includes good events as well. Providing for contingencies is like bridging the gap between having funds and liquid cash. An easy way to categorise contingent events is by the quantum of
Be the first to comment.
