America Saves Week – Building an Emergency Savings
This week we celebrate the long-term benefits of regularly investing in a savings account. Experts recommend having three to six months’ worth of bills stashed away for a rainy day. A well-stocked emergency fund can quickly relieve you of unexpected bills, repairs, or emergencies. Here are a few things to keep in mind when saving for the unknown.
It Takes Time
There is no magic formula to have thousands in your account. The truth is that building wealth takes time, but the trick is to be consistent. Set up an automatic transfer that will move funds from your checking to your savings without you even realizing it. Months from now, your efforts will begin to show in a sizable amount. Designate an account to be exclusively for your emergency savings.
What If Finances Are Tight?
Even if you aren’t sensing much wiggle room and are living paycheck to paycheck, you can still make smart moves in order to save for the future. Start by tracking every single expense. Identify expenses that are necessary and those that are not. Next, determine expenses that can be trimmed. Call your service providers and revisit your current bills and services. You may be surprised to find out that you can save a significant amount simply by bundling services, downgrading packages or by switching providers. Consider this a cleansing phase.
Start by giving yourself an achievable goal. A $1,000 emergency can set you back several months if you are not prepared. Bankrate’s January Financial Security Index revealed that just four in ten U.S. adults (41%) would be able to cover the cost of a $1,000 car repair or emergency room visit using their savings. These findings are not surprising, most Americans will simply reach for their trusty credit cards without thinking twice about it. But we want to help you become more proactive with your finances.
How Can Hughes Help?
Consider opening a “You Name It” account with Hughes and start saving as much as you can. Name your account after something that keeps you motivated to save and enjoy 0.20% dividends. Check out our financial calculators in order to help you reach your savings goals.