What You Should Know About Building an Emergency Fund | Cleveland Bradley County Teachers Federal Credit Union

Saving for retirement and building an emergency fund are two very different things, and it’s important to make sure the two don’t get tangled into one account.

Our team at Cleveland Bradley County Teachers Federal Credit Union wants to share ways to help you establish a strong emergency fund, starting today.

3 Ways to Grow Your Emergency Fund

The washer breaks. Your car battery dies. You need an unexpected root canal. Let’s face it—life happens. And when it happens, it usually costs some money to fix it.

Wouldn’t it be great if the next time “life happens” that you didn’t need to stress about where the money to pay for it would come from?

Let’s take a look at three ways you can start growing your emergency fund today so that the next time the unexpected happens, you know you will have the money to take care of it.

First, you need to know how much money to save for your emergency fund.

Most financial experts recommend having at least six months of living expenses saved up in your emergency fund. Therefore, take a look at how much money will cover all of your monthly expenses for six months should something happen.

Second, you want to think of your emergency fund like a “bill.” When creating a budget, make sure you have a column for your emergency savings account so that you are putting money into it from each paycheck.

If you treat your emergency fund like a bill, you are more apt to pay attention to how much money you are putting into the account so that you are building it up and not ignoring it.

Third, when you do put money into your emergency account, you are only allowed to use it for emergencies. Buying a new outfit for a dinner or paying for new house decorations for spring do not count as emergencies.

Instead, you need to only use the money for when an emergency truly occurs, like unexpected medical expenses. Then, when you are able, put the money back into your emergency fund so it is there when the next emergency happens.

Set up a Share Account at Cleveland Bradley County Teachers Federal Credit Union today so that you can be financially prepared for any emergency.