Step 1 to prepare an emergency fund

First of all, pick up a diary and write down those expenses of your month without which it is not possible to survive. This should include your household ration, electricity-water bill, children's fees, mobile-internet recharge and your EMI. Suppose your essential expenditure is Rs 30,000 per month, then for 6 months you will have to prepare a fund of Rs 1,80,000.