Do you have an emergency fund? Here's how to start!
Recent developments in the world have really driven home the importance of having an emergency fund. The prevailing advice is to have three months of living expenses in an easily-accessible account. If you've achieved that goal – kudos to you! But what if you're one of the millions of people living paycheck to paycheck? Or, maybe you're just getting back on your feet? How do you build an emergency fund when you're barely making ends meet?
Here are a few tips from our Certified Financial Counselors to get you started.
- Start small. Even if you only save $5 a week or just $10 each month, every little bit helps. It may take you a little longer to achieve your goal, but the important thing is, you'll be making progress.
- Open a new account. If you see your emergency fund balance every time you log into your online banking app, you'll be tempted to use it. To avoid the temptation, open an account somewhere other than your primary financial institution. Like the saying goes, "out of sight, out of mind."
- Pay yourself first. If possible, utilize your employer's direct deposit option. Make arrangements for your emergency fund money to be deposited directly into your savings account. If you don't have the money in your hands, it's a little harder to spend.
- Use windfalls wisely. If you get a tax return or birthday checks from your grandmother, use part of those funds (if not all) to pad your emergency fund. It wasn't money you'd budgeted for, so you won't miss it.
If you need help getting started, let us know. Any of our Certified Financial Counselors can help you work out the logistics. And before you know it, you'll have peace of mind to go along with your newly-established emergency fund.