Build an emergency fund
for life’s little surprises
Be ready for the unexpected even if the unexpected is something wonderful
Tips on building an emergency fund
- Know what you’re saving towards: All saving begin with goals. Figure out your emergency fund goals and the amount you want to save toward.
- Be consistent: Based on your goals, figure out an amount you can commit to save every month and stick to it.
- Start small: You may not have to break the bank. Start small and build up your discipline.
- Build it with bonuses: When you receive bonuses, raises, or retroactive payments, make sure to use them to give your emergency fund a big boost.
- Save it for real emergencies (and opportunities): Don’t use it for celebration or a family vacation. This is for real emergencies and opportunities only.
- Keep it separate: Don’t mix your emergency fund with your daily spending money. Keep it in a separate account.
- Talk to our experts: Talk to us. We can help you figure out realistic goals to set for your emergency fund.
Be prepared for everything life throws at you
Life gives us many opportunities and challenges, often at the same time. Losing your job can be difficult, but it can also be an opportunity to find a new and exciting career. A friend offering to sell you their car at a low rate sounds wonderful, but only if you can reasonably afford it.
Preparing for the unexpected means being physically, emotionally, spiritually, and financially ready for anything that comes your way. Having an emergency fund can help you with the financial part, and it’s way better than withdrawing funds from your investment or retirement account.
If you have a stable income stream, you should aim for 3-6 months’ worth of savings. If you’re in an unstable job, or close to retirement, it’s best to aim for 1 year’s worth.
Building an emergency fund may sound difficult, but it just requires a little bit of discipline. Think about how much safer your family will feel with a little extra tucked away. Think about how amazing it would be to say “yes,” when that golden opportunity arises.
What would happen if you lost a major source of income? Or had a sudden, unexpected expense?
It’s not fun to think about the “what if’s”, but these things do happen.
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You or your loved one loses a job.
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Your car meets in an accident or breaks down.
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You or a loved one has to undergo major surgery or an extended hospital stay.
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Your home suffers damage from a storm.
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A loved one falls into financial trouble.
The list goes on, but with an emergency fund, your worries can stop. An emergency fund will make you feel safe in periods of no income. You can cover your expenses and continue living your life, the way you want.
This way, if a challenging situation comes your way, you can avoid taking an emergency loan (or dipping into your retirement account or investments). You will be prepared for whatever comes your way.
The unexpected isn’t all bad. Be (financially) ready when opportunity comes knocking.
Your best friend wants to sell you a car, which you really need, for a very low price, and you know you won’t get a better deal. An emergency fund means you won’t have to watch these opportunities pass you by. Additionally you won’t have to make great sacrifices to jump on them. Be ready for those golden opportunities in life.An emergency fund gives you:
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The ability to take advantage of life’s opportunities;
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The option to avoid selling your assets to buy other ones; and
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Complete financial freedom, for when opportunity strikes.
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