As the Packers game on Monday night displayed, it is better to be prepared for an emergency that be caught flat-footed. Part of the reason why people dont prepare for this is that they dont want to think of the possibility of something negative happening to them. While it may seem cliché to say that it better to be safe than sorry, that really is the case.
Most financial experts recommend establishing an emergency savings fund where you have enough money to cover 3-6 months of basic expenses. The tricky part for many is figuring out how to put that money aside when the amount from each paycheck is already being divided for costs like rent/mortgage, electricity, phone/cable and other monthly expenses. From there, you end up encountering regular expenses like gas and groceries. Plus, you might already be saving up for something else and not feel like you can afford to set anything aside for emergency savings.
Psychologically, we might even think that an emergency savings account isnt necessary because wed grab x amount from savings and y amount from checking to help weather the storm. However, if you dont have emergency savings established, youre more likely to spend that extra cash that is in your Milwaukee checking or Milwaukee savings account, and thats no help if you find yourself in need of emergency funds.
As with almost any project, the trickiest part is taking that first step and then sticking with it to get the ball rolling. By designating an emergency savings account at your Milwaukee Credit Union, youll at least have something tangible that you can see is an actual thing. You can even just put in your spare change so that you have a small balance to begin with. Seeing that you only have $3 in your emergency savings can help serve as motivation to creating a plan to help save up money.
The next step is figuring out ways to get money flowing in to your emergency fund. The method that is both the easiest and the hardest is being on top of your finances. By figuring out if there is anything that can be trimmed from your expenses for at least a few months, you can divert that money towards your emergency savings account. This will help get the ball rolling as you grow the base of your fund.
The next time you come in to an Educators Credit Union location, we would be happy to help you establish an emergency savings account. Already have one? What advice would you give to those that need to establish an emergency savings fund?