When it comes to one of those last-minute emergencies, one may find themselves at odds when it comes to funds and savings. An emergency savings account can help alleviate any concerns one might have regarding medical bills, automotive issues, and even unemployment. This saving account is essential to your financial health, as it provides a buffer against your everyday bills.
Here are a few ways to plan ahead for a “rainy day”
- Create an emergency fund. An emergency fund is a savings account that’s available for a ‘rainy day’ – which can help you cover a multitude of expenses, including car repairs, home repairs, medical bills, and unemployment. Having these funds set aside helps decrease the need for loan or credit card debt.
- Decide how much to save. Generally, a rule of thumb is to have three to six months of expenses saved. A better way to calculate how much you need is to track your spending for a month to see how much to sock away. Starting small is easy – and helps you develop solid financial skills in the process.
- Get your savings started. Write down your savings goal after tracking your monthly expenses. Stick to this goal as best as possible. As you automate your savings via direct deposit, you’ll be saving money in no time without even knowing it!