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Emergency Funds 101: What You Need to Know

What's an emergency fund? Put simply, it's money you set aside for unexpected yet urgent expenses. An emergency fund (or rainy day fund) is one of the most important things you can do for your financial future. In fact, it should be one of your highest savings priorities. This is because emergencies—like a significant home or car repair, job lay-off or unexpected medical bills—can really set you back financially. But, when you have money put away for just such an occurrence, you minimize your financial risk and give yourself peace of mind knowing that you can handle unexpected expenses.

How much should I have in an emergency fund?

If you're just starting to build an emergency fund, a good starting point is to save at least $1,000. However, some financial advisors recommend setting aside anywhere from three to six months of living expenses. Another way to think about it is to save a certain percentage of your income, in the range of 10-20% for your emergency fund. While there are different opinions about the proper amount, it really comes down to your lifestyle and what makes you feel comfortable. For example, if you're single, you might not need as much as a married couple or a family with children. Begin with small goals, and then work your way up to your goal amount.

How do I build my emergency fund?

The first thing to do is to tackle your budget. Review your monthly spending and find “extra" money you may have every month. If you don't have much wiggle room in your budget, consider cutting back on a few expenses or looking for a side job to earn some extra cash. While building an emergency fund may require some sacrifices now, it's well worth it to be prepared for the unexpected.​

Move this money into a separate account using automatic transfers, or create a direct deposit to your savings account for every paycheck. Try to avoid keeping these funds in your personal checking account so you're not tempted to dip into it for everyday purchases.​

Can I speed up the process?

Automatic withdrawals will steadily build up your fund, but it can take many months to reach your goal. "Windfall" money can be an excellent way to grow it faster. Windfalls are things like tax refunds, salary increases and bonuses and monetary gifts. Instead of spending this money, deposit it in a high-yield, interest-bearing savings account like Wright-Patt Credit Union's TrueSaver® or Money Market account so you can access it when you need it.

Another way to build up your emergency fund faster is to save your spare change. You could use a coin jar to stash your extra change or take advantage of a savvy savings tool like Wright-Patt Credit Union's EasySaver® debit card round-up program^. With EasySaver^, every purchase you make with your debit card will be rounded up to the nearest whole dollar and deposited into your EasySaver account. Plus, WPCU matches 50% of your roundups earned during your first 30 days in the program and 5% on all your roundups each quarter after that^. You can then transfer the balance into your emergency fund and watch as your small change adds up to big savings!

Save Better for the life you want to live

Creating an emergency fund now can help assure you're able to live the life you want to live, regardless of the emergencies that come your way. Start with baby steps, putting aside a small amount of money each week or month and increasing the amount as you can. Over time, you'll have a solid emergency fund—and peace of mind—to help you through whatever the future may hold.

At Wright-Patt Credit Union (WPCU), we're here to make life a little easier for you with better ways to save, spend, borrow and plan for life's changes ahead. Want to learn more about our savings account options? Read more here or visit one of our convenient Member Center locations.

Looking for additional financial​ tips, tools and advice? Be sure to check out WPCU's online Education Center for helpful videos, brochures and worksheets on a variety of financial topics.

​​​​​^When you open an EasySaver® account, Wright-Patt Credit Union (WPCU), on a daily basis, will round up the amount of each debit card purchase posted to your checking account to the next whole dollar amount and transfer the total excess amount from your checking account to your EasySaver® account. WPCU will aggregate the rounded-up amounts from purchases that post to your checking account each business day and make a single transfer (“daily round-up transfer”) at the end of the business day. If on a business day you do not have sufficient available funds in your checking account, or if any transaction has overdrawn your checking account, we do not round up purchases posted on that business day and we cancel the daily round-up transfer for that day. If your debit card purchase is subsequently cancelled or reversed, such as a returned purchase, the corresponding daily round-up transfer will remain in the EasySaver® account. Refunded or adjustment transactions will not be rounded-up.
WPCU will match 50% of the daily round-up transfers that post to the EasySaver® account in the first 30 days after enrolling in the program. This 30-day period begins when the first daily round-up transfer posts to the EasySaver® account. After the first 30-day period, WPCU will match 5% of the daily round-up transfers that post to the EasySaver® account. To receive the Credit Union Match (“CU match”), you must have an open EasySaver® account, be enrolled in the EasySaver Debit Card Program and enrolled to receive eStatements, at the time of quarterly match. The CU match amount will be credited to the EasySaver® account at the end of each calendar quarter in an amount based on the applicable percentage of the accumulated daily round-up transfers for that calendar quarter or the actual balance in the account at the end of the calendar quarter, whichever is less. The annual cap on the CU match amount is $300.00. The annual amount of the CU match will be reported to the IRS on Form 1099-MISC. If you close your EasySaver® account before the CU match amount is posted to the savings, you will not receive the CU match for that calendar quarter.​
The minimum balance to open an Easysaver® account is $0.00. The minimum balance to open an EasySaver® is in addition to the purchase of one $5.00 membership share required to be maintained in your TrueSaver™. The EasySaver® account is a variable-rate account.
The Credit Union reserves the right to cancel or modify the EasySaver® account at any time, at its sole discretion. Only transactions posted to your account as debit card purchases are eligible. The Credit Union does not control whether a transaction is processed as a debit card transaction and is not responsible for how the merchant or any network processes a transaction.
For additional account information about the EasySaver account, please visit EasySaver Truth-in-Savings Disclosure.