Emergency Savings: How to Prepare for the Unexpected
February 05, 2019
Dealing with an emergency is stressful, but not having the money to pay for it is even worse. Luckily, you can take steps to build an emergency savings fund so you’ll always have a financial safety net. Here are three easy ways to financially prepare for the next time you’re faced with an emergency expense.
- Start by saving just $10-$20 per pay period.
Saving money doesn’t have to be a heavy lift. You can start by setting aside as little as $10 into your savings account each time you get paid. You’ll be pleasantly surprised to see how your small contributions add up over time.
You can take your savings a step further by saving automatically. Did you know that saving automatically is one of the easiest and most effective ways to save? That’s because when you save automatically, you can set it, and forget it.
Contact the human resources or payroll department at your job and ask about direct deposit. They’ll give you the right paperwork to complete. You’ll need your account number and routing number, so be sure to have that information available.
Once you begin saving automatically, you’ll be paying yourself first and your emergency savings account will grow each pay period. Saving automatically is a great way to set yourself up for success. If you start today, six months from now you’ll have half a year’s worth of savings set aside for life’s unexpected expenses. >> Learn more about saving automatically.
- Ballpark your expenses to find more ways to save.
Once you have an idea of exactly where your money is going, you’ll be able to cut costs and make some changes to find more money to save. Even if you don’t think you have any money to spare, give it a try. >> Check out 54 ways to save from America Saves.
Start by calculating your income. Include your pay from work, as well as any additional income you receive. Once you’ve determined your earnings, calculate your expenses. Be sure to include your needs like your rent or mortgage, phone bill and insurance first. You can include things like entertainment later.
Subtract your expenses from your income. If you have money left over, you can increase your automatic savings deposit. The more you save now, the more money you’ll have set aside in the future. Your savings will be especially helpful in the event of an emergency. >> Learn how to plan your finances.
If you find that you have absolutely no money left over after your expenses, you might want to consider finding a secondary source of income.
- Make a commitment to saving.
Savers with a plan are twice as likely to save successfully. You can set a goal and make a plan by taking the America Saves pledge. When you take the pledge, you’re making a personal commitment to save money and reach your savings goal. >> Take the America Saves pledge.
When you take the America Saves pledge, you’ll start receiving helpful savings tips about planning your finances, building credit and reducing debt. You’ll also receive information about the goal you’re saving towards.
Saving money can be made easy, start small and think big.
Guest Contributor: Darlene Aderoju, America Saves
Announcing the AFCPE® Connect to an AFC® Pilot
Need some additional support reaching your savings goal? We have resources to help! America Saves and AFCPE® are partnering to connect you one-on-one with an Accredited Financial Counselor® (AFC®) who is committed to answering your financial questions and providing you with free and unbiased financial advice that is tailored toward your personal financial goals.
Ready to meet your savings goal? Make sure to make a commitment to save by completing the America Saves Pledge during America Saves Week 2019 (February 25 –March 2) and then complete the AFC® interest form that will be sent to your email.