Let’s face the facts- spending money is just more fun than saving it. There is always something you can find to spend money on; a night out, dinner, new furniture, new car, the list goes on. There are also plenty of reasons we don’t like to have to spend money. These reasons are exactly when you need to have money in an emergency fund with the best banks. When the time comes to have to use the money, you will be glad you had some saved.
Using your emergency fund usually means something happened you weren’t planning on. You car breaks down, you lose a job, unexpected funeral costs for a loved one, medical bills or home repair. This list can also go on and on, and the reasons are not fun. Nobody wants to pay to have your car fixed, or your roof repaired or even worse, for a funeral of someone you love. As hard as these problems are to face, having some money set aside for such circumstances make the blow a little bit easier to tackle.
The Savings Plan
You can live in denial that these things will never happen to you, or you can face the music and start getting ready for when they do. Contributing to an emergency fund doesn’t have to be difficult or cost a whole bunch of your hard earned money. To increase your emergency fund consider these steps:
- Know how much money you need to cover three months worth of bills.
- Decide on an amount you want to contribute to the account.
- If you can’t comfortable make that monthly contribution, think of ways you can cut back to meet that monthly amount.
- Use bonuses, tax refunds and other money you weren’t planning on to increase the fund.
- Don’t touch the money unless it is a true emergency.
- Set up automatic withdrawals to keep on top of your monthly contributions.
Set a specific number that you would like that account to have and a date when you would like to have that amount. Be willing to work hard to make that goal a reality.
The best type of account to keep an emergency fund in is a savings account. CDs offer higher interest rates, but you can’t withdraw the money whenever you might need to without a penalty. You want the account to be easily accessible, but not access it unless an emergency arises. You would hate to be charged a fee for withdrawing money at a time when every penny is necessary. Find the best savings account that works for your needs.
Let’s hope that none of these awful things ever happen to you and you never have to dip into your emergency fund, but in the case that you do, start today to increase the amount in your emergency fund. Find ways to make a monthly contribution to ensure you are prepared for whatever emergency might come your way.