3 Ways To Calculate Emergency Funds That Can Be Adjusted To Conditions

Illustration of emergency funds (Unsplash)

YOGYAKARTA Awareness to have emergency funds is not yet owned by many people. In fact, emergency funds are very important to have. For those of you who plan to start managing finances, know how to calculate emergency funds appropriately.

Emergency funds are savings in the form of funds intended for emergency or urgent conditions. The emergency conditions in question can vary, such as being laid off or when an unexpected bill appears which is urgent and must be repaid immediately.

Regarding how to calculate emergency funds, in fact, each person has a different allocation depending on the need and the amount of life to be borne. In general, there are several ways to calculate emergency funds, namely as follows.

The simplest way to calculate emergency funds is to cut monthly income. The amount of a cut in income can be based on a percentage, for example 10 percent for a period of 1 year.

An example of how to calculate emergency funds is that the salary earned for one month is Rp. 1 million. So the amount of deduction that must be allocated to emergency funds is Rp. 100,000 per month. The discount to the emergency fund will be carried out in the amount of Rp. 100,000 for 12 months.

The allocation of this emergency fund must be carried out every month and consistently and must not be withdrawn unless it is in an emergency condition. You can also increase the percentage of emergency funds by adjusting your salary and needs.

Quoted from the official OJK website, the calculation of the amount of funds for emergencies is taken based on the amount of monthly salary adjusted to the amount of life borne. This means that there is a big difference in emergency funds by taking into account the number of people who are dependents.

For example, you are a man who is not married with a salary of Rp. 2 million per month. So the emergency funds that must be owned are 3 to 6 times the monthly salary, which is a minimum of Rp. 6 million.

The amount of emergency funds will be different if you have a dependent number. For example, you have 1 wife and 1 child, thus the total life in one family is 3. So the amount of emergency funds required is 6 to 12 times the salary earned. Thus, the minimum emergency fund that must be owned is IDR 18 million with an asummation per life of IDR 6 million.

The allocation of emergency funds can be taken by calculating monthly expenses according to the number of people.

For example, you are a man who is not married so you only bear yourself. The monthly income earned is IDR 2 million, while the average principal monthly expenditure per month is IDR 800 thousand. For emergency funds, you can use the formula of IDR 800 thousand x 12 (1 year).

However, this figure will be different if you are already married. For example, you have 1 wife and 1 child with an average expenditure of IDR 1 million. Then you must have an emergency fund of IDR 1 million x 12 which is IDR 12 million.

Those are some ways to calculate emergency funds. Visit VOI.ID for other interesting information.