An emergency fund is money kept aside for job loss, medical bills or urgent repairs. A common rule of thumb is three to six months of essential expenses; the right figure for you depends on how stable your income is.
Add up only the essentials: rent or EMI, groceries, utilities, insurance premiums, school fees and minimum debt payments. If that comes to ₹40,000 a month, three months is ₹1,20,000 and six months is ₹2,40,000.
Keep the money somewhere you can reach quickly, and top it up after you use it. The free emergency fund months calculator shows how many months your savings would cover.