Emergency Funds: How To Prepare For the Unexpected
If you had to finance an unexpected expense of $5,000, could you? One-quarter of us could not, even with the aid of a credit card or line of credit. One in 10 of us would even have difficulty handling an unexpected expense of $500, according to a new report.
But here’s the scarier part: Saving for vacation and entertainment get higher priority among younger households, compared with saving for education or home down payment. If you’ve got a Hawaii fund before an emergency fund, you’ve got a problem – or you’re likely to have one soon.
Recently, in her weekly column in the Globe and Mail, Smart Cookie Angela, inspired us to take action!
Action 1: Starting an emergency fund can be as simple as depositing $100 or less into a high-interest savings account. You can quickly find one that’s right for you at the Financial Consumer Agency of Canada’s site, or in the US at bankrate.com.
We recently me one Smart Cookie, who had named her ING savings account, her, “So I Can Sleep At Night” account.
Action 2: After the account is set up, make it a habit to AUTOMATICALLY stash small amounts or unexpected gains into your account instead of your wallet. If you’re carrying debt, apply the same approach to your credit cards or loans to ensure room for unforeseen emergencies. Setting up regular automatic withdrawals is an even easier approach. Once you’ve reached your savings comfort zone, then you can start planning for your next Hawaiian luau.
What are your thoughts on Emergency Savings Accounts? Tell Us Below
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