We’ve all been there: you've thought about saving for emergencies, you’ve even promised to start it next paycheck. You told yourself that there was time, the economy was good. And then COVID hit, and what felt like a lot of time now feels like worry. The good news is we can help you move from feeling worried to feeling secure by starting your emergency savings today.
Get started on your savings journey
Promise yourself to take the first step toward less money worries and start that emergency fund today. You don't have to wait until tomorrow or your next paycheck.
Start with an emergency fund goal, a tactic recommended by the Consumer Financial Protection Bureau (CFPB). Don’t worry about the “right" amount. Pick an amount that feels right for you and your situation.
Next, have some straight talk with yourself about “needs” versus “wants.” You may WANT that cute new outfit, but get in the habit of being honest with yourself if you really NEED it. If you have $100 to spend on a new outfit, think about starting your emergency fund with that money instead.
Start your savings habit
To get you in the habit of and keep up savings momentum, try making saving money automatic by using:
- Direct deposit
- You-name-it savings accounts
- Recurring transfers
Putting your savings in automatic mode helps kick your habit into high gear, without you having to think too hard about it. Ask your employer about changing your direct deposit with an amount like $20 or percentage (try 5 or 10%) going into your savings account(s). You can always make changes if you need.
Many financial institutions offer up to five different savings accounts with your membership. These are often called You-name-it accounts because you literally can name the account what you want. Try “emergencies,” “car repairs,” "home repairs,” or anything that feels right to you.
Once you have your emergency account created, keep up your savings momentum by regularly funding it. You can even set up recurring transfers so you don’t even have to think about it. Here’s a tutorial on how to do that.
You’ll be amazed at how fast these automatic options will build your emergency fund!
Stick to your routine
You have your morning routine, now keep to your emergency fund routine. Make savings part of your routine by logging into your account often. Mobile apps make manually transferring to your emergency fund or setting up recurring transfers a breeze. Remember to contribute a specific amount every week or every pay period.
Don’t get caught up
Don’t get stuck worrying about how much you should have, or that you should have started an emergency fund years ago. And don’t get overwhelmed thinking about the future. Remember the Chinese proverb: A journey of a thousand miles begins with a single step.
Ask for help
Don’t be shy and ask for help. At Michigan Schools and Government Credit Union, every branch office has at least one Certified Credit Union Financial Counselor. These are friendly MSGCU team members who have gone through a robust certification process to help members with their finances. Our mission is to help members be financially successful. We’re here and want to help.
You’ve got this!
Sources:
Lao Tzu—Philosopher
Consumer Financial Protection Bureau--CFPB
Read more about building emergency savings in this 5-minute interactive lesson.
Category: Finance
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