Why You Need an Emergency Fund
Emergencies can come in many forms. Medical bills, car repairs, home maintenance, or changes in employment are just a few examples. An emergency fund allows you to cover these costs without relying on credit cards or loans that could dig you into a hole. Having money set aside gives you flexibility and confidence when sudden changes happen.

Evaluate Your Current Finances
Before building your emergency fund, take a look at your monthly essentials. This includes rent/mortgage payments, utilities, groceries, insurance, and transportation. Knowing your essential expenses will help you set a realistic goal for six months of savings.

Start Small
You don’t need to have your full emergency fund right away; you can build it gradually. Start by asking yourself if you have any money that can be included, and determine how much you can reasonably set aside each month toward your goal.

Start with something manageable, such as one month of expenses, and grow from there. Set a monthly savings goal and consider using automatic transfers to make this process easier. If you need help, our team is happy to assist you.

Where to Keep Your Emergency Fund
Your fund should be easily accessible but separate from your everyday spending account. Putting it into your savings account is a safe and convenient option. Over time, using a high-yield savings account can help your money grow while remaining readily available for emergencies.

Review Regularly
Once you reach six months of expenses in your account, make sure to check in on your fund. Do this any time you use money from it for emergencies or when your expenses change. Life changes, such as a new job or moving, can increase your monthly budget, so it is important to adjust your savings plan based on what is essential to you. If you need help with budgeting, check out our blog from last month.

Need Help Building Your Emergency Fund?
If you would like guidance on creating an emergency fund, you are always welcome to visit any First State Bank Location. Our team is equipped to help you create a plan that works for your lifestyle and needs.

Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor to determine the best loan options for your specific needs.