The Importance of an Emergency Fund (Rainy Day Fund) and How to Build One Up
The Road of Life we take comes with many surprises, from storm damage to cars breaking down, unexpected expenses have the potential to be a major strain on our finances. That’s why it’s so important to always have a rainy-day fund!
For many of us, the prospect of an emergency fund is always a sound idea, but a lot harder to build up in practice. After all, most of us are more willing to spend our current finances on current needs rather than saving them up. To help the process of building up your emergency fund go down easier, here are some helpful tips from your neighbors at The Peoples Bank!
- One of the most agreed-upon goals for a savings account is to be able to cover anywhere from three to six months’ worth of expenses. However, your savings goal can be anything you want, so feel free to adjust it to your own wants and needs within your budget!
- Set multiple small savings goals, instead of one large one. The temptation is to stockpile as much money as you can all at once, but more often than not, this will just lead you to draining that deposit sooner than you’d want. Instead, start small and build up gradual savings goals, then you’ll see savings accumulate in no time!
- Don’t just keep an eye out on your savings, monitor your spending as well! Try to get an idea of how much you generally spend in a month, set aside however much you’re willing to put into savings and then strive to stay within your spending habits so that you don’t have to pull from said savings!
- If you can, automate your savings! Set up a savings account that automatically pulls a small amount from your checking account at a designated time, such as right when you get paid, and then you’ll be able to save without having to think about it!
Let us help you get started on your emergency fund today! The Peoples Bank offers a wide variety of Savings accounts and an exclusive Cents Up program, where every purchase you make is rounded up to the nearest dollar and moves the extra money into savings: perfect for building up a rainy-day fund!