The ₹40,000 Airfare Shock: What It Teaches Us About Emergency Fund
By Akhil Chugh
Date Dec 15, 2025
When flight disruptions recently unfolded across major routes, last-minute airfares surged to levels few anticipated. Tickets that typically cost ₹6,000–₹8,000 suddenly touched ₹30,000–₹40,000.
For many travellers, the urgency of their situation outweighed cost considerations. What should have been a routine journey became an expensive, unavoidable expenditure.
This episode reveals a deeper truth:
Unexpected events can create immediate financial pressure, regardless of planning, comfort, or capability.
An emergency fund is what protects you from such forced, high-cost decisions.
Importance of Emergency Fund:
Think of an emergency fund as stability capital.
It safeguards:
- Your long-term investments
- Your ability to stay disciplined
- Your family’s comfort
- Your decision-making quality
It ensures you are never compelled to make poor financial choices under pressure.
1. Power of flexibility:
Emergencies create inefficiencies and inefficiencies are expensive. Sharp spikes in airfare are not merely a result of demand. They reflect what happens when choices narrow.
Similarly, in life, an unexpected health issue, a sudden travel needs or a family emergency can demand immediate liquidity. The cost of navigating such moments without ready cash is significantly higher than the event itself.
An emergency fund gives you the power of flexibility.
2. Liquidity Is Leverage During Uncertainty:
When urgent needs arise and liquidity is unavailable, individuals often end up relying on:
- High-interest credit cards
- Short-term loans
- Premature withdrawals from investments
- Disrupting long-term compounding plans
These options introduce friction and reduce future financial efficiency. A dedicated emergency fund – separate from investments ensures that your long-term strategy remains untouched, even during short-term disruptions.
3. Stress Is Inevitable but Financial Stress Is Optional:
An urgent situation is challenging enough. Layered with unexpected expenses, it becomes overwhelming. A well-structured emergency fund serves a purpose beyond cash—it provides mental clarity. It turns a crisis into a manageable event rather than a destabilising episode.
3 Steps to Build an Emergency/ Contingency Fund:
1. Decide the size of your fund:
Begin by determining how much you’d need to cover essential expenses for six to twelve months. This should include necessities like rent or mortgage, utilities, groceries, and insurance premiums.
As a general rule of thumb, six months of basic living expenses stashed as a contingency fund is a must at all times to manage exigencies efficiently.
2. Identify highly liquid savings products:
There are many options to create a contingency fund. Some of them are listed below:
- Liquid Funds
- Arbitrage Funds
- Ultra Short-Term Debt Fund
3. Create a financial plan to build your emergency fund:
It is important to set aside a portion of your monthly income towards this goal. The best way is to automate it. You may set up a SIP in an arbitrage fund or alternative debt fund.
Conclusion:
The ₹40,000 flight ticket was more than a travel inconvenience; it was a reminder that preparedness determines how gracefully one handles disruption.
An emergency fund is not built for returns.
It is built for resilience.
Start setting yours aside—quietly, steadily, and consistently.
Because life’s unplanned moments should be managed with confidence, not compromise.
Connect with us today, and we will help you build an emergency fund designed to protect your long-term goals from unexpected disruptions.
Download our mutual fund app & start investing for your long-term financial goals.
Happy Investing!