NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Narendra Modi
    Amit Shah
    Box Office Collection
    Bharatiya Janata Party (BJP)
    OTT releases
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout

    India
    Business
    World
    Politics
    Sports
    Technology
    Entertainment
    Auto
    Lifestyle
    Inspirational
    Career
    Bengaluru
    Delhi
    Mumbai

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
    Home / News / Business News / How liquidity saves Indian households in financial emergencies 
    Summarize
    Next Article
    How liquidity saves Indian households in financial emergencies 
    Refer to this guide

    How liquidity saves Indian households in financial emergencies 

    By Sanjana Negi
    Jan 27, 2025
    06:49 pm

    What's the story

    Liquidity is the unsung hero of personal finance, often overlooked until a financial crisis strikes.

    It's the ability to turn assets into cash quickly and without losing value.

    For Indian households, liquidity implies having the means to handle unexpected expenses or take advantage of opportunities without disrupting long-term financial plans.

    Emergency fund

    Importance of an emergency fund

    An emergency fund is the foundation of financial liquidity.

    Financial experts advise keeping a minimum of three to six months' worth of living expenses in a readily accessible account like a savings account or a liquid mutual fund.

    This fund serves as a financial cushion, preventing you from falling into debt during emergencies like medical emergencies or unexpected job loss.

    Liquid assets

    Choosing liquid assets

    Not all assets are created equal when it comes to liquidity. Savings accounts provide easy access but low returns, while real estate offers great returns but is harder to sell quickly.

    Indian households need to diversify their assets, maintaining funds in both savings and mutual funds. This way, you have money available when you need it, but you're not missing out on growth.

    Market trends

    Understanding market conditions

    Unfavorable market conditions can make certain investments much harder to sell.

    For example, stocks become less liquid during bear markets, as fewer people are interested in buying them.

    By keeping an eye on market trends and understanding how they affect the liquidity of your investments, you can make smarter decisions about when to buy or sell.

    Ratio analysis

    Liquidity ratio: A handy tool

    The liquidity ratio is a measure of financial health, comparing liquid assets to short-term liabilities.

    A ratio of one-to-one means you have enough liquid assets to meet your immediate liabilities.

    Striving for a higher ratio provides additional peace of mind.

    By regularly calculating this ratio, Indian households can proactively manage their finances, making sure they always have enough for a rainy day.

    Facebook
    Whatsapp
    Twitter
    Linkedin
    Related News
    Latest
    Finance

    Latest

    ECB proposes to host remaining IPL 2025 matches, claims report BCCI
    PSL 2025 postponed indefinitely due to India-Pakistan tensions Pakistan Cricket Board
    Pakistan attacks India with drones again; family in Punjab hit    Jammu And Kashmir
    Carlos Alcaraz returns to form at Rome Masters after injury Carlos Alcaraz

    Finance

    How telemedicine startups are securing funds for healthcare innovation  Business
    How to make animated stickers on WhatsApp like a pro Technology
    Don't have HRA? This tax hack could save you thousands Business
    India turns ideas into currency: Loans backed by IP rights  Startups
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2025