Forget the ‘get-rich-quick’ schemes, the tax havens and the ‘100 properties in just 12 months’ spruikers, the most important element to your personal financial plan is your Emergency Fund.
As an expat, your Emergency Fund is more important than ever. It is designed to protect and cover you for the following:
- Job loss
- Medical emergencies
- Unforeseen travel expenses
- Unforeseen family expenses
- Home repairs
How much should you have in your Emergency Fund?
Start by estimating your monthly expenses. This will include the following:
These are typically the expenses that you could not eliminate in the short-term if your income were to cease or fall.
As a general rule of thumb, you should have three to six months’ worth of your expenses in your Emergency Fund. If your monthly expenses are $5,000, then you should have $15,000 to $30,000 in your Emergency Fund.
Where should I keep my Emergency Fund?
Given the very nature of your fund, it’s important that it remains safe and liquid. Depending on your personal situation, you should seek to keep this in low-risk assets such as cash or interest-bearing deposits that do not carry long-term lock-in periods.
What if I don’t have an Emergency Fund?
If you don’t have one in place already, start putting a small amount of your monthly savings away in order to set it up. Once you have your fund in place, you can have the peace of mind and comfort to allow you to build your assets and achieve your financial goals.
You can access my online emergency fund calculator here – http://singapore.feebasedfinancialadvice.com/calculate/cash-flow-calculators/
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book a complimentary consultation here.