Emergency fund 101

It’s inevitable—life happens. When the unforeseen happens—because it will happen—an emergency fund can be the difference between an inconvenience and a financial disaster. An emergency savings account is designed to cover unplanned expenses such as unexpected vehicle repairs or medical emergencies. Having a cash reserve earmarked for these situations can protect you from having to fund emergencies with a credit card or other unsecured debt.

A Savings Deficiency

A recent Bankrate survey reported that 51% of Americans have less than three months savings and 25% have no savings at all. The pandemic no doubt highlighted the importance of emergency savings to cover unexpected hardships such as job loss or prolonged illness. If you reside in the camp of individuals that does not have a fully funded emergency savings—or want to increase your savings—there is no time like the present to establish a plan to build your rainy-day fund!

 

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