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Savings and your money: How to build an emergency fund

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Keep Saving These!

One of the worst things you can do while trying to reduce your debt is to suspend your savings. This is not good for your finances or your family. You may have maxed out credit cards or other types of debt piling up but if you have an unexpected emergency you have nowhere to turn! And believe me - an emergency (whether large or small) will happen!  The key to saving while reducing debt is to save first and start small.

You save first by setting up your direct deposit through your employer to go to your savings first. Even if you have a 401K  or other retirement fund that you are contributing to, it's still important to keep a savings account that is far enough to not be tempting but close enough to access in the case of an emergency - and only for a true emergency!

Some online banking choices I suggest for your emergency fund savings are ING Direct or Ally Bank.   A local bank that I use for Money Market Savings is Delta Community Credit Union because it is not my regular bank which reduces temptation (to create "emergencies") but close enough that I can get there if I need funds quick.

You start small by saving $5 - $10 per paycheck. Although $5 or $10 may not seem like a lot, after a few checks you will build up a savings account that you can rely on in the case of an emergency. The best plan of attack is to only pay minimum amounts on credit cards and other debts and funnel all extra funds into an emergency fund until it is built up.  For most people, this emergency fund should be no less than $1000

More details on this budgeting tip and others will be shared at an upcoming Personal Finance event that will be held in November.  Details will follow shortly but feel free to reach out sooner by checking me out here.

Comments

  • Mary 5 years ago

    Thanks for this post, still trying to figure out how to balance saving and paying off debt. Looking forward to your event!

  • Melissa 5 years ago

    Thanks for the comment Mary, this is affecting many families. I hope this helps!