How can I effectively balance cash flow and long-term investments?

[Tanvi]

With a ₹1 lakh salary, is locking ₹1.5 lakh into a PPF actually the best move? I'm starting to think I should prioritize my cash flow and emergency savings first. Why focus on the funding method if the strategy itself might be too restrictive?

[Siddarth]

You're making a sensible choice by hesitating to lock everything into a PPF while still needing a solid emergency reserve. While PPF is great for tax-free growth, the 15-year lock-in makes it hard to access cash quickly.

First, try to build an emergency fund covering 3 to 6 months of expenses in a simple savings account. Once everything is set, you can effortlessly manage PPF and SIPs without worrying about your monthly budget. Liquidity is just as important as growth.