On Emergency Fund

Someone said “you should always keep an emergency fund of 1L”. And that got to me.

That sounds rational if you think about it. You should at least have some money for uncertainties and things going south on you. And this figure sounded strangely safe to me.

What I have noticed about life, having lived it so far, is that a large part of it happens in smaller time slices, and the larger ones are reserved for a whole lot of routine and boredom.

There is a part where the majority of your life happens. The time you spend wishing, hoping, waiting, and just being. For me, that list also includes worrying, and it sits at the very top of that list, tinting this part. And then there’s the other part, where things happen, tragedy or magic, and that is what gets compiled as your story.

I digress.

I find it a struggle nowadays trying to control my life’s equation, to put a handle on the recent weight explosion of two notorious variables: time and money. Variables that, up till now, used to sit unobserved, ignored, and overlooked. Because I used to have plenty of one and not much need of the other.

I never imagined myself ruminating about managing time and money, yes, the cliché topics that boring adults have to deal with. I feel bitter and a little bit excited about that at the same time. Because to increase the degree of control over life is to manage these topside variables. There are others too, but that is not the matter of today’s brooding.

So I was sitting quite unequally on my bed, working on a project. It took me some time to realise that the anxiety this time pointed back to something oddly specific: the thought of “the emergency fund”.

The deal is that you shouldn’t see your goals through binary vision, but think in percentages. How close you are. And also, how wrong you could be. There is uncertainty, but it is quantifiable. This way you know how much ground you still have to cover.

In my case, I’d reach around 87% of the emergency fund goal by the end of this month.

And after sitting with this for a while, the figure of 1L starts to feel more psychological than practical. Because if you have even 60k in your bank, are you really unsafe? At least from the trivial disruptions that happen now and then. And at the same time, even 1L isn’t enough for something truly catastrophic. A sudden medical issue doesn’t care about your neat target.

So the number starts looking more psychological than practical.

What I think I was doing was attaching safety to a figure. But safety does not work like that. It can’t be a fixed number, but a range that grows, shrinks, and gets rebuilt. More importantly, what matters is how fast you can recover after getting hit.

So a better question is not: “Have I reached 1L?”

but

“Am I in the range of being okay?”