No one wants to contemplate worst-case scenarios. But when we don’t look at the “what ifs,” we sometimes fail to prepare for
the unexpected. Trouble is, that can have serious financial consequences and add undue stress during an already stressful moment. Maintaining an emergency savings account may be the thing that keeps you afloat and stress free. With a rainy-day fund,
you can meet unexpected financial challenges such as repairing the breaks on your car, fixing a broken window, or visiting the emergency room.
Here are a few ways to build an emergency fund without feeling a major strain on your wallet:
1. Set a Monthly Goal
Setting a monthly goal helps you get in the habit of saving regularly and makes the task less daunting. In order to meet the goal, try automatically transferring a certain sum (even if it’s small) to your savings account each time you get paid!
Explore ways to change your daily spending habits and emergency savings over time.
2. Keep the Change
When you stumble upon some loose change or an extra $5 bill, drop it into a jar at home. When the jar is full, deposit it into your savings account. If you don’t carry cash, try a mobile savings app that makes automatic transfers for you based on
the rules you set.
Discover recommendations for how much to maintain in an emergency fund.
3. Double Check Your Checking Account
If you have money left at the end of a pay period, move it to your emergency fund! It may seem like an insignificant amount at the time, but after a few months, you’ll start to notice real growth.
Learn how checking account features work so you can choose the account that best fits you.
4. Save Your Tax Refund
Saving your tax refund can be an easy way to boost your emergency stash. When you file your taxes, consider having your refund deposited directly into your emergency savings account.
Review your various saving account options and start developing habits that will help you reach your goals.
5. Cut Expenses
Try to find certain monthly expenses that you can trim. Do you need the full cable package, or can you get by with less? Maybe you can cook more meals at home, carpool, or avoid small daily purchases like coffee.
Re-evaluating your monthly budgeting can be made easier with this tool, which helps you prioritize spending
so you can meet your financial goals.
To view all savings-related content, visit our Financial Wellness Center at redwoodcu.org/financial-wellness. Always remember, Redwood Credit Union is with
you every step of the way throughout your financial journey.
This article was developed as part of Redwood Credit Union’s partnership with EVERFI, Inc.