Preparing for the worst that life brings isn’t a pleasant thing to do, but it’s an important part of lessening the impact of those scenarios. Whether it’s a financial strain, illness or injury, the loss of a family member, or something else entirely, having an emergency fund in place is a good way to keep your family prepared for the unexpected.
Here is your brief guide to setting up – and filling up – your emergency fund this year:
Opening a savings account isn’t difficult. It’s the planning and upkeep that goes along with it that can be stressful for some people. The trick that many successful savers swear by is to simply jump in. If you wait until you feel prepared to save, you may never do it. Start by setting small goals and give yourself a pat on the back when you hit them – but don’t beat yourself up when you don’t. Just keep trying!
A good rainy-day fund should have the equivalent of three-to-six months’ worth of income accessible to you if an emergency arises. Whether it’s a massive medical bill or an emergency that causes you to be off work and your family to live off of your savings until you can return, this fun should provide for at least that amount, so keep that in mind when saving toward your goal.
Can you cheat when it comes to savings? You can, when it’s yourself that you’re cheating.
Two ways that people cheat themselves out of making the most of their emergency funds is by taking funds that were originally allocated to other resources – such as college or retirement funds – and stashing them in their emergency funds, as well as using credit cards as a replacement for emergency funding. These both have major long-term consequences that can spell disaster for your emergency fund and your family’s financial well-being.
Building your own fund can be tricky. That’s why many people partner with a savings pro. Talk to the experts at Munn & Morris Financial to get the help you need to set up your rainy-day fund – and then be prepared for whatever life throws at you!