Why You Need an Emergency Funds
You likely did not start an emergency fund in anticipation of a global pandemic, but it has certainly demonstrated the importance of putting money aside for emergency situations.
An emergency fund is a fundamental component of a financial wellness plan. It is basically a sum of money that is built up and set aside to be used only in case of an emergency, such as a significant unexpected expense, or a significant drop in income.
How much should an emergency fund consist of?
The generally accepted standard is that an emergency fund should cover three to six months of living expenses, which are those critical and unavoidable expenses such as:
- Accommodation (rent or mortgage payments)
- Loan payments
- Car insurance and fuel
- Bills payments and utilities
- Groceries
How do I build an emergency fund?
- Calculate the amount you’ll need
- Set up automatic savings with YCU
- Set aside tax refunds and bonuses
- Reduce discretionary spending
How do I get started? Come talk to us. We can help you determine the amount of your emergency fund and get you set up with an appropriate savings amount to start you on your way.
Become a Financial Genius with Brilliant Advice from Your Credit Union. For more information on the benefits of banking with a credit union call: 1-800-379-7757.
