Back to all articles

Why You Need an Emergency Fund

Why You Need an Emergency Fund

No matter how much we prepare for potential setbacks, the unexpected can always happen. Your car can break down, your roof could start leaking, or you could be facing unemployment.

If you think about your financial picture, do you have enough to cover (or at least offset) any unforeseen costs? If your answer is no right off the bat, then establishing an emergency fund should be a priority.

What is an emergency fund?

An emergency fund is a liquid savings account with money set aside just in case something financially unexpected occurs.

How much should I save?

The answer depends on your financial situation, but as a rule of thumb, it’s a good idea to have up to six months of living expenses saved. You’ll want to be able to cover rent or mortgage, utilities, transportation, food, insurance and any other regular expenses you may have.

How do I start?

The idea of saving up that amount of money may seem daunting, but it doesn’t have to be! Any amount you can contribute is a good start, even if you can only save $20 dollars a week.

Here are a few quick tips that can help you get started:
  • Set a monthly savings goal. Making a goal for yourself helps manage your expectations. Sit down and figure out what your expenses are, where you can cut back, and how much you can reasonably afford to put away.
  • Make it automatic. By setting automatic transfers to your savings account, you’ll start saving without even thinking about it.
  • Save your savings. If you brew your own coffee in the morning instead of stopping at your local shop, it may seem easier to spend that money you saved on something like going out to lunch. Instead of spending those savings, no matter how small they may seem, put them into your emergency fund.
Regardless of how you choose to build your emergency fund, the most important thing is that you start. You’ll have peace of mind knowing that you’re helping yourself later!

For information on savings accounts, different options for depositing money to your emergency fund and more, visit our website!
View all blog posts under category First Timer View all blog posts under category Saving & Spending View all blog posts under category automatic deposits View all blog posts under category budget View all blog posts under category build your savings View all blog posts under category clearview View all blog posts under category clearview fcu View all blog posts under category clearview federal credit union View all blog posts under category emergency fund View all blog posts under category financial education View all blog posts under category financial literacy View all blog posts under category monthly savings View all blog posts under category saving View all blog posts under category savings View all blog posts under category savings goals View all blog posts under category start your emergency fund

Recommended for you

10 Reasons Millennials Choose Credit Unions

Many of these differences are some of the 10 Reasons Millennials Choose Credit Unions over banks.