Nobody wants to think of the "worse case scenario", right? Well, when it comes to your finances that's an area that you should always be prepared for the "what ifs".
Whether you find yourself without a job or a natural disaster strikes, the key to being prepared for an emergency is having a plan and an emergency fund established.
To help you better prepare if an emergency should happen, three financial steps you'll need to take to ensure you are as ready as you can be for what's to come.
Your emergency plan is calling. Your back up plan is waiting for you.
Why You Need an Emergency Fund
Step 1: Start Saving Now
Don't wait for a crisis to occur before realizing you don't have enough money in your savings to cover your monthly expenses. Instead, start putting money away now to build your emergency savings. It's recomended that you save three to six months' worth of living expenses1 in order to cover for an unexpected emergency.
Want a fun way to save? Try our tap-to-save feature in Online and Mobile Banking! All you have to do is tap the coin to start saving. It's that easy!
Tap the coin to start saving!*
Try Our Save For A Rainy Day Calculator
Step 2: Create A Contingency Plan
Sit down and devise a backup budget. Your backup budget should be a separate financial plan that excludes things that you could live without. For instance, your contingency plan will include things such as housing, food, and healthcare expenses, but will exclude discretionary items such as new shoes. Having a second budget in place that minimizes your expenses will help you immensely.
How To Create A Budget
Step 3: Review What You Have
Make sure you frequently take stock of what you have. Whether it's liquid assets or extra food in the pantry, you need to be aware of what you have in order to be best prepare for an emergency. Do you have frequent flyer miles? Do you have credit card rewards? Consider what resources you can draw from should you need extra funds or materials. Once you have a list of your assets, you can determine which of them you could use to lower your monthly expenses.
Key Takeaways
While you can't prevent unexpected emergencies from happening, you can do your best to plan for them. If you are adequately prepared, a major crisis can just be a small setback. These three steps will help you should you encounter an unanticipated crisis.
Why You Need an Emergency Fund