Few weeks back I wrote about importance of defining our financial target, so we can plan our investment (how much, how long, and what instrument) to achieve that target. This time we will discuss a very crucial thing that we need to put as our number one financial target, preparing our emergency fund.

Emergency fund will be required for any unexpected thing that may happen to us, for instance if we, for some reason would become jobless, when we need to pay some urgent unplanned bill like medical supposed we don’t have insurance or bill more than limit that we could claim. All of those require emergency fund, therefore, due to its function, emergency fund should be liquid enough for us to credit it whenever and wherever we would need it.

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Investing is like an insurance, we have to own it when we don’t need it but it could be late to be bought when we would need it. So it is wise to start investing as soon as possible, but before we go further on all investing related matter, it is also good to know what goal we want to be achieved with our investment. Goal is what we called as financial target.

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