According to a January 2021 Bankrate article just 39 percent of Americans surveyed say they could comfortably cover an unexpected expense of $1,000. Everyone has unexpected expenses and emergencies. Having money set aside can save you money in the long run because it helps you avoid interest charges.
The target amount you need for emergencies depends on your family’s situation. A good place to consider starting is to set a goal to save $1,000. A great time to start contributing to an emergency fund is right after you get a raise that way it can have little or no effect on your take home pay. Another great time to build your emergency fund is when receive a tax refund.
Tips for starting your emergency fund:
- Set up a separate account for your emergency fund. This will reduce the temptation to dip into your emergency fund for monthly expenses.
- Consider keeping it in an interest earning share (savings) account so that you can access it when you need it.
- Make contributions automatic. Direct deposit through your company payroll is an easy way to accomplish this.
Energize can help you reach your savings goal through payroll deductions. Contact us today to set up a separate interest earning, share account specifically designated for your emergency fund.