Emergency Fund
Emergency Fund
Emergency funds are dedicated savings accounts that are reserved for financial emergencies. An emergency fund is 3-6 months of bills for your home. This savings account is a financial tool that creates a cushion between you and life’s unplanned expenses. Establishing a dedicated emergency fund is an essential financial strategy to protect your family.
Reasons why you need an emergency fund:
Job loss
Medical or dental emergency
Unexpected home repairs
Car repairs
Unplanned travel expenses
Loss in the family
Strategies for saving
The best way to save for your emergency fund is to incorporate your financial goal into your budget. Executing a sufficient budgeting strategy is essential to financial growth. Please review our top four budgeting strategies which can be tailored to your financial goals and life:
50/30/20
Envelope
Pay Yourself First
Zero Based
Building your emergency fund
The best place to store your emergency fund is in a high-yield savings account. High yield savings accounts are a financial tool that offers better interest rates than traditional accounts. These accounts are mainly online, easily accessible, and offer quick access to your money. Look for banks and credit unions that insure deposits through the FDIC or NCUSIF.