Emergency Fund: Plan for the Unexpected
From the loss of a job to a major fender bender, it’s almost impossible to predict when life’s unexpected and oftentimes costly moments might occur. During these difficult times, an emergency savings fund can be a major life-saver and helpful source of relief for you and your family.
As an important part of your financial wellness, the money you save in an emergency fund can help you pay your mortgage, vehicle loan, utilities, and even the grocery bill following a major interruption to your life and/or paycheck. While building an emergency fund may seem like a stretch for your budget, with a little hard work and determination, you’ll be surprised by how much you can save.
Get started today with some helpful advice from our personal finance experts:
Set Up a Special Account
When establishing an emergency fund, our financial experts recommend that you open a special savings account, separate from your regular savings account. This will help you to avoid using your emergency fund for unnecessary purchases, like new clothes, concert tickets, or a night out on the town. Explore all the great savings account options
available to BHFCU members.
Evaluate Your Finances
You should evaluate your financial obligations (loans, credit cards, bills, etc.) to determine how much money you need to put away in your emergency fund. While we typically recommend saving three to six months’ worth of expenses, anything you can put away now will likely be helpful in the long run.
For those with uncertain incomes, who are self-employed or seasonal, you should consider building up a larger emergency fund.
Create a budget that includes putting a portion of your paycheck into your emergency fund savings account. We recommend setting up an automatic transfer of funds to the dedicated emergency fund account following each pay period. One of our personal financial associates would be happy to help you complete this step, as well as set up direct deposit for your paycheck. Be sure to stay on top of your savings with Online and Mobile Banking, Money Management, and many of the other great services from BHFCU.
Additionally, consider picking up a part-time job, side-gig, or holding a garage sale to make additional money that can then be deposited into your emergency fund.
Pay Off Debt
If you have any major credit card debt or student loans, our experts advise that you start by saving $1,000 and then concentrate your energy and money toward paying off your debt. Once you have your debt paid down, you should then work on building your emergency fund to an appropriate level.
With an emergency fund, you can turn life’s major emergencies into minor inconveniences. Learn more about all the great tools and services BHFCU has available to help you build your emergency fund by giving us a call at 718-1818 or stop by any BHFCU location.