While you know you need a bank account for financial emergencies, you could struggle to deposit money into the fund. Rather than hope for the best while maintaining the same financial habits, learn helpful tips to grow your emergency fund and give yourself one less thing to worry about.
Have a Realistic Goal
While you may want to save up at least three months of expenses for your rainy-day fund, that may not be feasible right now. Aside from working with a company that offers financial planning Franklin Lakes NJ, you could also start with a smaller goal. For instance, aim for saving $1,000 to start with.
Open Your Emergency Account With a Separate Bank
Rather than open a savings account with your primary bank, use a separate institution instead. Using separate banks makes it inconvenient to access your funds quickly, which is what you want for an emergency fund. Consider funding a high-interest online savings account. While exploring your options, focus on online banks that don’t lock up your money for a specific time and don’t charge fees for withdrawing your money.
Change Your Budget
One reason you may struggle to fund an emergency account could be that your budget needs retooling. Sit down and track where your money comes in and goes out. You could have areas where you can save money, such as canceling subscription box services you don’t use, cooking at home more and eating out less, buying quality used items rather than brand-new products and using coupons and discount cards while grocery shopping.
If you aren’t worried about incurring overdraft fees, consider automating deposits into your emergency fund. You can treat your emergency fund like a monthly bill and include it as part of your regular budget if that makes it easier to reach your savings goal.
It’s easier to build an emergency fund when you have the right insights and tools. See how the above recommendations work for you and your savings goals.