Saving for the Future how to Set up an Emergency Fund Benefits of having an Emergency Fund

Whether you are a single person living on your own, and elderly couple in their retirement an emergency fund is very important in order to oneself for the future.  Having an emergency fund can help cope with much of life’s stress that may come your way. These emergency funds are important for many different reasons.

–  Unexpected Bills:  One of the most important and probably most expensive occurrences in life to have an emergency fund for is unexpected bill payment. These payments can range anywhere from credit card debt, to car payments, to probably most importantly health care. Having a fund to pull from in times of emergency is crucial.  This can help increasingly by getting people started if they are in financial trouble for paying off some of these expenses.

–  Big Purchases:  However, sometime these emergency funds can be put to good use. For example, when purchasing a new home or moving out into an apartment, an emergency fund can give you a “nest egg” of sorts, which can help you fall back onto in case of any financial problems one might face.

If you want to start an emergency fund today, here are a few tips to help you start saving sooner:

1.  Start Off Small

If you are a young person who is looking to start making one of these funds, start off small.  If you are someone who is in school or working at a low paying job set aside a few dollars every week into a savings account.  If possible, try opening a tax free savings account. This way whatever money you invest in yourself won’t be taxed on, and you can grow your emergency fund without paying for big charges. 

2.  Direct Deposit

If you are someone who can invest a little more money into their savings, set up an account that can be directly connected with your bank. This way you can wire money right into an emergency fund without you even seeing it on your next paycheck. This way, you can be assured that your will be protected if an emergency comes your way. This is an ideal choice for any one who is planning on starting a family. It can also be very beneficial with when trying to pay any payments on a house, car, or paying for a newborn.

The best advice is to start early! The earlier you can do these steps into protecting your future, the better it will be for you in the long run. No one knows what life will throw at you, so the best thing you can do is protect yourself for it.