How To Build an Emergency Fund
Building emergency savings is often easier said than done. Unlike other savings goals, your emergency savings aren’t something you’ll necessarily see a reward from, which can make it hard to prioritize.
Even so, it’s pivotal to build a plan for your emergency savings goals. In this blog, we’ll go more in-depth about how to do just that.
Why Do You Need an Emergency Fund?
Emergency savings are just that — money set aside in case of emergency. Emergency savings are commonly built for loss of work, but could also include unexpected costs for your car, home, or medical expenses.
It’s important to have this money set aside to prevent financial hardship in the event of these circumstances. A large, unexpected bill could take quite a toll, but an emergency savings could help resolve most, if not all, of the issue.
How Much Do I Need To Save?
Many financial experts describe emergency savings as three to six months of expenses. However, this may look different depending on several factors — your career industry, financial risks, dependents, and more. Learn more in our blog, “How much should be in your emergency fund?”
How To Build An Emergency Fund
Just like any financial goal, building an emergency fund takes time. But just like any goal, every dollar is one step closer to your final goal.
Ultimately, building an emergency fund looks different for everyone. If you’re living paycheck to paycheck or have inconsistent income, you may be limited. The important thing, however, is to build the habit of regularly contributing to your emergency savings — even if that amount is small.
Strategies For Building an Emergency Fund
The best way to get started with your emergency savings is to develop a plan. Get started with the following tips:
- Build your contribution into your budget. If you plan to save what you have left after your budget and costs, you’re really just planning not to save. If you want to build your savings, rework your budget to include savings contributions as part of your budget and regular financial activity.
- Try automatic savings. By enabling this, you’ll automatically contribute to your emergency savings without having to coordinate amounts, timing, etc. This can be especially helpful if you struggle to prioritize saving in your budget.
- Set a small, attainable goal. A benchmark goal helps you stay motivated in your savings. You can even decide on a small treat that will help incentivize you to get there. Once there, try leveling up to another step closer to your long-term goal.
- Look for new opportunities to save. Every day comes with financial decisions, like packing a lunch versus eating out. If you’re building your emergency savings from the ground up, look for these little opportunities to save a few more dollars toward your savings goal.
Find More Ways To Save With Landmark National Bank
Building an emergency fund can feel like a daunting task. Luckily, the experts at Landmark Financial Bank are here to help. Connect with one of our friendly, helpful partners and learn how Landmark can help you meet your savings goals. Chat with our team online or get started at a Kansas location near you today!