Emergency! Emergency! Emergency!

When there is an EMERGENCY, what do we do?

We call Superman? Batman? or the Ghostbusters?

We FORGET everything and DO WHATEVER IT TAKES to solve the emergency!

When there is sickness in the family, an accident, or a crisis in the economy resulting to a lost of job, what do we do?

We take out our SAVINGS, liquidate our INVESTMENTS, and worst case we go into DEBT.

What if the market is down? We still sell our investments at a loss!

That is why it is important to have an EMERGENCY FUND and a Wealth Protection Plan.


An Emergency Fund is a fund intended to take care of unexpected emergencies. It is placed in a savings account or short-term time deposit worth 3-6months of monthly expenses.

The first step in building your emergency fund is to know your MONTHLY EXPENSES through proper budgeting. (To track my daily expenses, I use the app Spendee. It also shows a summary of your income and expenses at the end of the month.)

How to Compute the Needed Emergency Fund?

Emergency Fund = (Monthly Expenses) x 3-6 months

If your monthly expenses is P20,000, your Emergency Fund should be:

at least:           P20,000 x 3 months = P60,000
maximum:     P20,000 x 6 months = P120,000

Anything more than P120,000 should be invested because it would be losing its value due to inflation.

So when the economy hits bottom and you lose your job, you can still continue to live with dignity and find another job for the next 3-6 months.

When you get into an accident and cannot work and you already consumed your Vacation Leaves, you can still live with dignity for the next 3-6 months even when your employer stops paying your salary.

When someone in the family gets sick, you don’t need to liquidate your investments and sell at loss or get into debt.

The needed Emergency Fund is so BIG and I have no savings yet, How can I achieve it?

If you have not saved anything yet, don’t worry! You can do it easily through the tips I will be giving below or find a wealth planner who can guide you in the process and will make sure that you stick with the plan.

You don’t need to achieve it in the next 2 months. You can start saving a portion of your income for your emergency fund and aim to finish it in the next 3-5years.

So if you are earning P20,000 per month and would be needing to have an emergency fund of P60,000-P120,000, you would just need to save P1,667-P3,333 per month for the next 36months. That’s only P56-P111 per day. You can also save a portion of your bonuses to make things faster.

Now think of the daily expenses where you can save on such as taking a walk instead of riding a tricycle, drinking 3-in-1 Coffee instead of Starbucks, or giving up cigarettes and drinking alcohol.

The key is identifying your needs and wants; and what wants are you willing to lessen to start building your emergency fund.

When you still find it hard to lessen your expenses, remember that when there is an EMERGENCY, those expenses will not save you! Your EMERGENCY FUND will do.

There is a saying about money:

For sickness, disability, and critical illness, there is a way that by saving a minimum amount per month, you can generate an enormous amount of wealth to take care of you, it is called insurance (which I will discuss in future posts).


To summarize, below are the steps in setting up an Emergency Fund:

  1. Know your monthly expenses through a budget.
  2. Multiply your monthly expenses by 3 months or 6 months.
  3. Have a Plan:
    1. How long? 3-5 year savings plan?
    2. How much will you set aside from your monthly income and bonuses?
    3. Identify needless expenses you can give up or lessen.
  4. Set-up a separate savings account for this.
  5. Stick to the Plan.
  6. If you think you need help, find a wealth planner who can guide you in the process.

Your Millennial Wealth Planner,

Harold Q. Gardon, CWP, CEPP

How do you find the article? Do you have any questions? Please feel free to message me if you want me to discuss a particular topic or if you are seeking financial advice.

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