Saving for an Emergency Fund
I’m sure the thought of creating a savings account has crossed your mind ONCE in the past year. Opening a saving account is an easy process and if you already have a UCB checking account, the process takes just a few minutes. The bigger question is why would you want to open a savings account? One of the top reasons people choose to create a savings account is to have an emergency fund. An emergency fund is a buffer that you can lean on for unexpected expenses. Those expenses can be anything: medical bills, car repairs, unforeseen home maintenance, and unemployment. Creating an emergency fund can help offset that burden.
How to go about creating an emergency fund?
The range people say to save up for an adequately funded emergency funds vary. The range typically falls into a 3 to 9-month period. That means you should be able to pay for all your monthly expenses for 3 to 9-months. A reminder! Rome wasn’t built in a day and neither will your emergency fund. Saving is hard, especially if you aren’t accustomed to doing it every month. Start slow and stay consistent!
Steps to building an emergency fund.
Create a budget.
How can you save if you don’t know what you spend? Start with pen and paper and mark down your income and expenses. Figure out where you can cut and where you can save!
After you set up your budget for the month, set an end goal and set how long you want to take to get there. If your end goal is $10,000 in 20 months you need to save $500 a month! Stay sharp and stick to your plan! As you save, don’t be afraid to celebrate after reaching certain milestones, after all it’s supposed to be fun!
Pay yourself first!
Learning to save is easy when the money you never see the money that is being saved. Set up monthly deductions from your paycheck so parts of your paycheck goes right into your savings account! Another way to pay yourself first is with UCB’s Round UP Savings program. With RUS every purchase gets rounded up to the nearest dollar. A purchase of $5.09 is rounded up to $6.00 and .91 cents will go into your savings account.
Setting up an emergency fund is not a complicated process! It just takes time, consistency, and a plan! Set up a plan today and create savings account with UCB. While you’re at it, sign up for RUS and start saving money!