Emergency Savings
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Are you ready for an unexpected expense? Be prepared with an emergency savings fund!
One of the first steps to building your financial independence is to set up an emergency savings fund so you'll have something to fall back on in case of a financial emergency. Most financial planners recommend having at least 3 month's worth of all your monthly expenses set aside for emergencies.
Here are a few simple steps to starting an emergency savings fund:
- Use part of your tax refund to jump-start your emergency savings and continue to save a little every month by paying yourself first!
- A simple savings account, apart from your day-to-day spending account, is a good place to start an emergency savings fund. If you're eligible to open a bank account (click here if you need help with getting one) and have internet access, then an online, high-yield savings account is a great place to start your emergency savings. These accounts offer no minimum balances, no fees, FDIC insurance, and an annual savings rate around 5.05%, well above the average, national savings rate of 0.54%. These high-yield savings accounts can be opened at no cost at banks like HSBC Direct, EmigrantDirect, and ING Direct.
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