Creating an Emergency Fund
What happens if you lose your job, become disabled or lose your ability to earn money? Do you and your family have enough money saved to help you through one, two or three months of reduced or no income?
Situations like these happen every day to good people. Some are able to make it through without a lot of financial strain because they have planned ahead. Others are financially devastated. One thing everyone can do to ensure they are prepared for times like these is to have an emergency fund in place.
An emergency fund consists of three to six months’ worth of expenses saved in an easily accessible savings account. This allows you and your family to get through rough patches should your income or ability to earn money be compromised.
Here is an easy six-step plan to get an emergency fund in place with Lincoln Savings Bank.
1.Open a savings account at Lincoln Savings Bank- we have a savings accounts available that provide the benefits and access you need. Learn more about our individual savings accounts here. Once you have a savings account set up, it’s time to start thinking about how much you want to save.
2.Think about how much you want to save per month- how much money do you want to save each month? This will depend on any expenses you have in the near future or down the road. Once you have an idea of what you want to save you should consult your budget.
3.Examine your budget- you know what you want to save per month, but does your current budget allow it? By examining your income and spending you can see where you need to make adjustments to reach the monthly saving amount.
4.Set a monthly savings goal- once you know what you are able to save per month you can start establishing savings goal. This will be the total amount of money you need to save to have three to six months of expenses put away in your savings account. You can also break this goal down into smaller chunks to help you measure your progress.
5.Take advantage of automatic deposits- if you have an Online Banking account with Lincoln Savings Bank, it would be beneficial to set up a recurring transfer from your checking to your savings accounts every payday. This ensures your savings plan stays on track.
6.Find small ways to boost your savings- additional income or reducing your spending are two ways to further boost your emergency fund savings.
If you need helping deciding which savings option is best for you, the staff at Lincoln Savings Bank is here to help. Simply call or come by with your questions and we’ll help you find the right solution for you.
Lincoln Savings Bank, member FDIC