What does it mean?
If your savings can handle a few rough months — job loss, medical bills, or sudden expenses.
How does it work?
It checks how many months of your monthly expenses your savings can cover.
Formula:
Emergency Readiness % = (Liquid Assets ÷ [Monthly Expense × Cushion Months]) × 100
Example: You spend ₹50,000 a month and have ₹3 lakh saved — that’s a 6-month cushion. That’s a healthy safety net.
Why it matters:
When life surprises you, you don’t need to break your long-term plans. You stay calm and in control.
FOLO Tip: Life is unpredictable. Your emergency fund is the umbrella that protects your family.
