October Topic of the Month: What’s an Emergency Fund and Why Do I Need One?
An emergency fund is an account that exclusively holds money for large, unexpected expenses. You can use the emergency fund for things like medical costs, major car repairs, home appliance replacement, unemployment – essentially any expense that you didn’t plan for in your monthly budget that needs to be attended to.
How much should I have in an emergency fund?
Well, that answer varies from person to person. If you don’t have any emergency savings, try to start by saving $500 or $1,000. Eventually you’ll want to work your way up to enough savings to cover three to six months’ worth of expenses, if you’re able.
What kind of account should I have?
A savings account with a high interest rate that you can access quickly is an option. You should try to keep this separate from your regular bank account so that you don’t dip into it unless it really is an emergency.
What other tips can you give me?
Set a goal to save a certain amount of money each month. If you can, set that amount up to be direct deposited into your emergency fund – out of sight and out of mind. Every few months, check in and see how much you have, how much more you’d like to save, and adjust your goals. If you do tap into your emergency fund, you’ll want to plan to rebuild it right away.”
An emergency fund can give you peace of mind and help you feel safe from unexpected financial hardships. Call Orsinger Investment Group, Inc. at (724)588-9067 so we can help you figure out your emergency savings goals and build a plan that works for you.