The word emergency, by definition, is “a sudden unexpected situation requiring immediate attention.” Unfortunately, emergencies often come with financial consequences. Our finances can be immediately impacted by an accident, job loss or a significant home repair. Having an emergency fund can lessen the financial impact that can come with an unforeseen event.
What is an emergency fund?
An emergency fund is a savings account meant only to help in an unanticipated situation such as those mentioned above. (It is not meant to be used to pay for college tuition or a vacation!)
Why do you need an emergency fund?
Life is unpredictable. Many unexpected situations – such as a medical emergency or unemployment – can cause a lot of stress and threaten your financial status. An emergency fund can help get you through a crisis and keep you financially stable, so you don’t have to take a loan or pile expenses onto a credit card. It also relieves you from the anxiety that can happen when put into a sudden, stressful situation.
The amount you keep in an emergency fund will depend on your household expenses and lifestyle. However, the suggested minimum amount is to have enough money in your emergency fund to cover three months of living expenses. If this seems too much, start by depositing a few hundred dollars and make an effort to contribute a fixed amount every month to build your fund. You can easily increase your emergency fund by having an allotted amount transferred automatically into the account.
Your emergency fund should be readily accessible, such as in our personal savings account or Investment Plus checking account. Having a separate fund will ensure that you don’t spend it (out of sight, out of mind) and you can easily monitor your balance.
We want to help you feel confident as you prepare for whatever life throws at you. Visit your nearest Waypoint Bank location to start your emergency fund and talk to us about which of our options to consider for your situation. We are also happy to help you find ways to build your account.
Since 1883, Waypoint Bank has been providing superior financial solutions that promote the small-town approach of putting relationships first. For 140 years, we’ve been earning your trust in the most friendly and professional manner possible while guiding your success.