5 Strategies to Build Your Emergency Savings
Stashing extra cash for your emergency fund each month can be overwhelming or even seem impossible. That being said, it’s important to save a portion of your paycheck each month, so you’re covered in case something unexpected occurs.
Why you should save:
You never know when an emergency will arise, so it’s better to be prepared and have funds put away, “just in case.” Emergency situations can include, but are not limited to:
- Car repairs
- Medical emergencies
- Natural disasters
- House repairs
- Job loss or the inability to work
The ability and peace of mind of knowing you can support yourself during any of these situations will lessen the worry and leave you grateful you saved in advance.
How much you should save:
It’s important to have three to six months’ worth of your income saved into your emergency fund. This ideally would be enough to support you if you were to lose your job and need support while seeking one, or be enough for a payment of an unforeseen medical emergency. However until this is attainable, any amount saved can help decrease the burden of an unexpected event.
Where do I keep my emergency fund?
Two options to keep your emergency funds could be a money market account or no-penalty CD. Both accounts are options where the funds remain liquid assets, while keeping them safe and out of a savings or checking account, leaving less temptation to spend it.
5 strategies to build your emergency savings:
While it’s unreasonable to contribute your whole paycheck to any one fund, you can use strategies to gradually build your saving while not breaking your budget.
Here are five simple strategies to help you get started:
- Allocate a certain amount to be put away each month.
- Put any extra cash that comes your way into emergency savings.
- Rebuild your budget to fit saving for your emergency fund into a monthly bucket.
- Collect from your coin jar and put any extra change into your emergency fund.
- Cut down on your spending to free up extra money for a “just-in-case” scenario.
Use these helpful methods to start saving without straining your paycheck. Be smart with your finances and get started today!
The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.