Most people are familiar with the phrase “save for a rainy day." The idea is that you should tuck away money when times are good so that you're financially prepared for the unexpected. However, according to a recent Bankrate survey, only 39% of American households have enough in their savings to cover a $1,000 emergency. Are you prepared to handle an unexpected financial strain such as job loss, vehicle repairs, home maintenance or emergency medical bills? If not, here are a few easy strategies to help you start a rainy day fund today.
Cut back on excess spending
At first, it can be difficult to find extra cash to contribute to your emergency fund. Start by reviewing your monthly spending habits to identify any unnecessary expenses such as dining out, going to the movies or buying extra clothing. Cutting back on just a few of these extra expenses each month will help you build up your emergency fund in no time.
Save your spare change
Did you know that your spare change could add up to major savings? You can go the traditional route by using a coin jar to stash your spare change at the end of the day or use a savvy savings tool like Wright-Patt Credit Union's EasySaver® round-up program. When you sign up for EasySaver, every purchase you make with your debit card will be rounded up to the nearest whole dollar and deposited into your EasySaver account. Over time, you'll see your everyday purchases turn into significant savings!
Make saving automatic
One of the best ways to build your emergency fund is by automating your savings. Start by designating a portion of your paycheck to go directly into your savings account. WPCU's Mobile and Online Banking makes it simple and easy to schedule recurring transfers from your checking to your savings account each month. Chances are, you won't even miss the money if you never see it in your checking account!
Grow your money at great rates
Unexpected events and emergencies can happen to anyone, at any time. Make the most of your rainy day fund by putting your savings into a high-yield, interest-bearing account. Store your money in a safe, easy-to-access account, such as WPCU's TrueSaver® savings account or a Money Market Account to grow your fund at some of the best rates around.
While you can't predict events like job loss or a medical emergency, you can plan for them. With careful preparation and a diligent savings strategy, you will establish a financial cushion for whatever the future may hold.