Create an emergency fund to cater for unforeseen circumstances – Financial analyst advises

The Director-General of the Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh has advised workers to create an emergency fund to cater for unforeseen circumstances.

He said although one may have a secured job that provides a consistent income, Mr Ogbarmey Tetteh said it is prudent to prepare for any eventuality.

Speaking on Joy FM‘s Super Morning Show on Thursday, he advised that at least, an equivalent of six months’ salary should be kept in a fund for emergency purposes.

According to him, the impact of the COVID-19 pandemic on the country’s unemployment situation underscores the need for such an initiative.

“What the experts say is that, in an emergency fund, you must have at least six months of your monthly income sitting there. The thinking is that assuming you go out of a job, within six months, you should be able to turn things around and find your feet. But at least within that six months period, if you have the equivalent of your six months’ salary in that emergency fund, it can keep you going. Look at Covid-19 and how it affected the different sectors. It is an outcome I believe people should plan towards,” he said.

Although six months’ salary is the benchmark, he insisted that “it doesn’t mean that when you get to six months, then you relax. The more the better.”