Emergency Funds: Building and Using Them

Piggy bank on a life jacket
We have all experienced an unexpected financial emergency – a loss of income, an unexpected medical expense comes up, or something in the house breaks and needs to be repaired. Setting up a dedicated bank account for situations like this is a great way to protect yourself and should be the key component of any solid financial plan. You’ll also be able to relax and breathe a little knowing that you have money set aside in your emergency fund.

The amount you’ll want to have in an emergency fund depends on your situation. Some say saving one to two months’ of expenses is a good start, but most financial experts recommend your fund should be able to cover three to six months’ of household expenses.

Below is a guide for starting and growing your emergency fund, and how to use it.

Create a Budget

Before you can truly start saving, it’s important to understand how most of your money is being spent. Having an understanding of this will help you find saving opportunities in your current spending habits. Your budget should include recurring expenses like your rent or mortgage, utility bills, and estimates of any out-of-pocket expenses for things you may spend money on such as eating out or clothing.

Develop a Plan to Start Saving

Woman adding coins to her savings accountThere are a number of different ways to get your savings started – one of the easiest ways is to set up automatic recurring transfers into a designated bank account. We always set good intentions, but it’s hard sticking to them sometimes. Setting up automated transfers is putting you on a path for success. Once you start to see growth, gradually increasing the amount you save will give your savings even more of a boost. Setting up and managing this account is super easy with our digital banking app.

Keep your Emergency Fund Accessible

You want to make sure that your emergency fund remains somewhere safe and accessible, but not in a place where you might be tempted to spend it on non-emergencies. It’s recommended to keep these funds in a separate account from your regular checking and savings. Financial expert, Suze Orman recommends giving this account a specific name such as: ‘My Emergency Fund’ or ‘My Safety Net’ as a reminder of your goals and to keep you on track every time you log in to access your accounts.[+] You can check out our Savings account page for more information on how our products can help you start and reach your savings goals.

Find Creative Ways to Continue Growing Your Fund

It’s important to remember that even after you reach a short or long-term goal with your emergency fund, you shouldn’t stop there. At any moment, your circumstances can change resulting in your monthly expenses increasing. That is why it’s a good idea to think about additional ways you can continue to build on to your fund.
Taking advantage of one-time opportunities to save is a great way to give your fund an extra boost. There may be certain times out of the year when you receive an influx of money (such as a large tax refund) that you can use to put some money aside for rainy days. Finding items around the house that you can sell for extra cash, starting a side hustle, finding one-time paid opportunities, and making cuts in your budget are all other great ways you can quickly go about building up your emergency fund.


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