Imagine this: It’s 97 degrees outside and your air conditioner dies. It’s going to be $5,000 for a new unit. Do you know how you will pay for this?

Sounds stressful, right? Emergencies come in all shapes and sizes with the only thing predictable being that we all encounter them at some point. Start preparing now with an emergency fund.

Imagine how much less stressful this scenario would be if you had the cash to pay for it. We recommend having at least three months of expenses saved in your emergency fund.

Recommendations on starting your emergency savings fund:

• Start! This often can be the hardest part.  Make a commitment to set aside money for your emergency fund before you pay any monthly bills.  It might be hard at first but we promise it gets easier and more rewarding with time.

 

• Set a goal. Even though we recommend saving 3 months of expenses in the event of an emergency, it’s ok to save whatever amount works best for you and your budget.

 

• Don’t touch. Only use this fund for emergencies. You’ll be glad the money is there when emergencies arise.

 

• Keep it liquid. Keep your emergency fund in an account that is easy to access when you need it.  Savings, money market or checking accounts all work well for this.  Investment accounts do not work well as it can take several days to get your cash in hand.

 

• Use your emergency fund. No one likes an emergency. But not having to stress about the finances around an unexpected event is why you start a fund like this. When the unexpected does pop up, use the fund!

 

• Replenish as needed. After you pay for an emergency, it’s important to begin saving again.