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An emergency savings fund is money set aside for those unexpected expenses in life. Whether it’s an unplanned medical bill or sudden loss of income, an emergency savings fund is there to fall back on so you don’t have to max out a credit card.
Now that we know why we should have an emergency fund, lets talk about how to get started with your savings plan.
1. How much do you need? The amount of money you need will vary; however, many financial experts suggest saving three to six months’ worth of expenses. So, the first step in formulating a plan is figuring out what your monthly expenses are. You will want to consider things like rent/mortgage, groceries, utilities, car payment, and all other monthly bills you incur.
2. Where should you put the money? When considering where to place your emergency savings fund, keep in mind that the funds should be readily available and easy to access in an emergency. Most people choose a savings or checking account. A checking account is likely easier to access, but for some, it might be too easy to use in non-emergency situations. In this case, a savings account may be a better option for you.
3. How often should I put funds into the account? The process of funding an emergency savings plan may be different for each person. It’s important to take into consideration things like how often you get paid and how much money you have left each month after bills. For some, an automated transfer might be the best option because the money is being put aside regularly without having to think about it.
Having an emergency savings fund can be a step in the right direction when it comes to setting yourself up for financial success. For questions about savings or checking accounts or setting up automated transfers, feel free to reach out to F&M Bank at (800)235-5331 or visit our personal banking page.
F&M Bank – banking that feels right. Member FDIC.