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.