Maintaining an emergency savings account may be the most important difference between those who manage to stay afloat and those who sink in debt. An emergency savings fund consists of a small amount of money, usually in a savings account that you do not have easy access to.
5 ways to save $500 to $1,000 for emergencies
1. Save automatically. Have part of your paycheck automatically deposited into a savings account or set up regular transfers from your checking to your savings account.
2. Save your loose change. Putting aside 50 cents a day over the course of a year will allow you to save nearly 40 percent of a $500 emergency fund.
3. Make your monthly credit card payment on time. The $30-35 you save by not being charged a late fee each month on one card would save you most of the money you need for $500 in emergency savings.
4. Save a portion of your tax refund. Use tax form 8888 to split your return.
5. Bring lunch to work. If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in a year, you could afford to create a $500 emergency fund and still have money left over.
Where to keep emergency savings
Keeping your money in a savings account makes it much less likely that you will use these savings to pay for everyday, non-emergency expenses.
Are you ready to set your goal?
Kentucky Saves is part of the non-profit, America Saves and encourages individuals and families to save money and build personal wealth. It can help you develop your goals and take action. To join as a saver, go to kentuckysaves.org, enroll and you’ll receive the following benefits:
· Free subscription to the quarterly American Saver newsletter.
· Free monthly e-mail newsletters with savings advice from national experts.
· Free access to the members-only Savers Tracking Tool to help you reach your goals.