January LiveWELL – Simple ways to build an emergency fund

If you are new to building an emergency fund and you are wondering how much you should start with, it is important to start with small, short-term goals. If possible, start with a goal of $500, then work your way to saving half a year’s worth of living expenses. Having an emergency fund can help you avoid getting into financial binds such as taking out our using a credit card or loans. See below for tips on how to build an emergency fund:

Create goals: Start with setting an overall financial goal for how much you would like to save. Then, create a monthly savings goal for how much money you would like to put aside each month to help you work toward your large savings goal.

Move money into savings account automatically: If direct deposit is an option with your employer, you may want to consider automatically dividing your check in half with a percentage deposited to your savings account and a percentage deposited into your checking.

Save your change: If you pay in cash when making purchases or for financial transactions, if you ever have change left over, take it back home and put the remaining change in a jar. Once the jar is full, you can deposit what’s in the jar into a savings account. There are also savings apps on your smart phone that you can use to process any remaining change from transactions into a savings account such as provide examples and link.

Save your tax refund: Your tax refund is another way to put some extra cash aside during the year. If you are expecting a refund, it’s a good opportunity to have it redirected to your savings account. Another option is to adjust your W-4 so that you can have less amount of money withheld from your paychecks each month and instead redirect it into your savings account.

Information derived from nerdwallet.com