Are You Prepare For a Financial Emergency?
Do you feel like you have enough set aside for an emergency? If your car breaks down or you have unexpected medical expenses, what will you do? If you don’t have savings, you will have to use your credit cards.
Everyone should have an emergency savings account. The first step down the road to financial freedom is living within a budget. The 2nd step is to prepare for financial emergencies.
So Easy to Start
It is so easy to start a savings account. Usually, all you need to open one is $5. Capital One offers completely free online checking and savings accounts. I have a bank account with Capital One, and I love how it lets me deposit checks just by taking a picture of the check.
Don’t keep your emergency money at the same bank as your other accounts. This makes it harder to dip into your emergency stash to pay regular bills. You want to make it difficult for you to access the money so that you have to think twice before breaking the piggy bank.
How Much Should I Save?
Set a goal to save $1,000. If you can tuck away a little each month until you have $1,000, then you will have the peace of mind you need. Once you have this much, you should focus your money toward paying down your debt. Once your consumer debt is paid down all the way (not your mortgage), then you should start adding to your savings account again.
How Long Does It Take?
You could save $1,000 in 10 months if you put $100 aside every month. But if possible, you should try to do it sooner by saving more per month. What if your money is tight and you can’t spare $100 per month? Then it’s time to get started on a budget so you can find ways to cut back your expenses. For 87 ideas on how to reduce costs, click here.
Ways to Save
There are lots of strategies to make it easier to save.
- You can have the money transferred directly from one account to the other on a monthly basis.
- Many employers have the option to deposit part of your paycheck directly into your savings account.
- Us a savings app like Acorn that takes a little out of your account here and there and invests it in the stock market to earn interest. If you sign up for Acorns using this link, you can get $5 free to start your account.
- Do a Cash Savings Challenge. Learn more below.
Another method to save is to do a cash saving challenge. There is a cash savings worksheet in The Modern Mom’s EPIC Guide to Easy Budgeting, and it is completely FREE! The Cash Savings Challenge is where you put aside a little cash each day until you reach your goal of $1,000. You could keep the cash in a safe place at home and then when you reach your goal, you might want to deposit it into your emergency account.
Whatever method you choose, it’s important to get that emergency fund started ASAP. It will provide you with peace of mind and the freedom to pay for an emergency if it happens.
Get your FREE copy of The Modern Mom’s EPIC Guide to Easy Budgeting. The Modern Mom’s EPIC Guide to Easy Budgeting! 28 Page Workbook with 87 ideas to reduce expenses, 14 beautiful worksheets, 7 bonus lessons, and easy-to-follow instructions. Download below!