It never fails – the car breaks down, a sudden flight needs to be taken or a sudden job loss happens – right after the rent or mortgage is paid. Household funds are thin for awhile yet these major emergencies are beckoning. Enterprises TV offers information about why we need emergency savings and how to build it painlessly.
How to Get an Emergency Fund Started
Start small. Plan to transfer $500 from a checking account to a savings account once a month. If there is enough room to add more, add more. Make it painless and easy by signing up for an automatic transfer of funds.
Make the Fund Hard to Access
Open a Certificate of Deposit at a financial institution that is separate from where you regularly bank. Keep the fund liquid so it can be accessed easily if an emergency arises.
What is an emergency to you? A vehicle breakdown? Sick relative in another state? Job loss? Major home repair? The landlord doesn’t renew the lease for another year? All of these can drain monthly expenses and leave some dependent on credit card cash withdraws which incur huge fees. EnterprisesTV believes once you know what an emergency is to you, you will know that this fund can only be used to that purpose.
There is no better time to get an emergency fund started than the beginning of a new year. Take time to find the best way to stash this money away. Budget monthly household expenses and sock extra cash aside for the one day that will take you by surprise financially. Think like a Marine: prepare for the worst and hope for the best.