Did you have a financial emergency, and were you able to pay for it without using a credit card or taking out a loan? That’s the peace of mind of having an emergency fund in place, which helps diminish stress during a financial crisis.
But, if you needed to drain most or all of your emergency savings, it can leave you feeling financially vulnerable. That means it’s time to rebuild your emergency savings fund. The good news is you have experience on your side. You built your emergency savings once, and you can do it again. Here are 5 tips to help.
- Revisit your savings strategy. If you’ve already been contributing a certain amount to your savings account each month, you have a great habit in place. You can keep it up by setting up automatic transfers through mobile* or online banking. If you already have a portion of your checking account funds transferred automatically to savings, consider upping the amount. If you aren’t currently taking advantage of automatic transfers, now is a great time to start. It makes saving easy and efficient.
- Cut expenses. It can be beneficial to cut some expenses in order to help rebuild your emergency fund faster. Can you reduce your cable package or eliminate a streaming service to save money each month? Are you eligible for home or auto insurance discounts? Check with your providers about less expensive options.
- Sell items you no longer need. Consider selling any belongings you no longer use but may still have value, including clothing, books, DVDs, video games and furniture. Not only can you earn extra for your emergency fund, but you also reap the reward of reducing clutter.
- Work a side job to earn extra cash. A tried-and-true way to save more is to earn more. Whether a regular part-time job, seasonal work or a freelance gig, extra income can quickly give your emergency fund a boost. Ask your employer about direct deposit so your earnings are automatically deposited into your account quickly and securely.
- Deposit a windfall. If you’re expecting a large sum of money, such as a year-end bonus from your employer or a tax refund, prepare to put it in your emergency savings fund rather than spend it.
We Can Help You Stay In Control
If you experience a financial setback while you’re rebuilding your emergency fund, rest assured Navy Federal Credit Union is here to help. Contact us, and we can explore options together.