New Delhi: The idea that constant income is sufficient to maintain household stability is slowly breaking down. The monthly salary continues to be the primary source of support for many middle-class Indian families but the pressure on the system has grown. However, with a disciplined approach to budgeting and savings, salaried Indians can handle any emergency situation.
CA Nitin Kaushik said in a post in X that the salary is a lifeline but for most of the middle class that line is frayed and on the verge of breaking. In 2026, losing your job is not just a setback but more of a mathematical trap. Your rent, EMIs and school fees continue even if your income stops. Kaushik said that if you do not have a buffer, you are not only jobless but also insolvent.
Kaushik said that the math of survival has changed. Earlier, three months of savings was the gold standard but today, with a 5 percent to 6 percent inflation crawl and a volatile job market, six months is the absolute floor which moves to twelve if you have a family or aging parents.
Kaushik said for determining one’s true emergency fund requirements one needs to start with basic necessities like rent, groceries, utilities and insurance. He said that if your monthly burn is Rs 40,000 then your survival fund is not a suggestion but a Rs 2.4 lakh shield. You need closer to Rs 4.8 lakh just to keep level if you work as a freelancer or in a high-risk sector.
Kaushik advised keeping the funds active while also preventing them from being stranded. A typical savings account with a 3 percent interest rate is guaranteed to lose money due to inflation. He advised using sweep-in FD for the first Rs 1 lakh which gives 6 to 7 percent returns with instant liquidity. Liquid mutual funds offer T+1 redemption and marginally improved post-tax efficiency for the remainder, he said.
Kaushik described a methodical approach to budgeting. Phase one focuses on reducing all non-essential spending for 60 days to save a month’s worth of expenses like Rs 40,000. You can use this mini fund and avoid using the credit card when an emergency occurs. A recurring deposit or a liquid fund SIP should be created at the second stage. Consider this an EMI that you owe to yourself in the future. To reach your six month goal, top it up with every bonus, tax refund or side-hustle.
Kaushik said that 76 percent of salaried Indians who do not have an emergency fund find themselves in a high-interest debt trap when a crisis arises. The fund is not about growing wealth but about making sure that you prevent a bad month from turning into a bad decade, he said.
