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Emergency Savings

Emergency Savings

Most of us started learning about the importance of saving money as a child with the gift of a piggy bank. Having money saved up is an important part of your financial health. It could be for a large purchase such as a house or a car, or for emergencies. An emergency savings fund is probably one of the most important things you can do to help achieve financial security; however, it can also be the hardest.

What is an emergency fund?
It’s money you set aside for the unexpected. Life’s events that you don’t plan for (and we aren’t talking about that great deal on a big screen TV.) This means medical bills, unexpected job loss, home repairs, car repairs, etc.

How much should you save?
The recommended amount is 3-6 months’ worth of living expenses. However, an emergency fund doesn’t look the same for everyone. A couple with two steady incomes can likely afford to be closer to the 3 months of expenses, while a single person with a freelancing job, may want to lean more towards 6 months. Either way, start where you can. As little as $500 can make a difference if you have an unexpected expense.

How can I build up my savings?

Make a budget and stick to it. Budgeting money to save after your necessary expenses can help you beef up your account.

Have a goal in mind. Want to save $2,000 in a year? Figure out how you can cut costs to add more to your savings and hit your goal.

Adjust your goals. Did you get a promotion? Pay off some debt? Divert a portion of this extra money to your savings.

Save your tax refund. Although it only happens once a year, this is a good opportunity to boost your savings in one big chunk.

What’s the right account?
Most of the time, a traditional savings account will do the trick. However, if you have higher balances, a Money Market account could be the right option for you. Click here to see what types of savings accounts we offer and open one online.

Remember, the sooner you get started, the more money you can save with life’s little surprises.