Tag Archives: emergency fund

Jar full of cash labeled Emergency Fund with stack of books in the background

How to Build an Emergency Fund: 6 Tips and Strategies

In uncertain times, having an emergency fund can provide peace of mind and financial stability. An emergency fund is a savings account specifically set aside for unexpected expenses, such as medical emergencies, car repairs, or job loss. Here’s how you can start building your emergency fund and ensure you’re prepared for whatever life throws your way.

Why You Need an Emergency Fund

An emergency fund acts as a financial safety net, helping you cover unexpected expenses without resorting to high-interest debt. It can prevent financial stress and provide a sense of security, knowing you have a cushion to fall back on.

6 Tips and Strategies for Building an Emergency Fund

1. Setting a Goal

How much should you aim to save? Financial experts typically recommend having three to six months’ worth of living expenses in your emergency fund. This amount can vary based on your personal circumstances, such as job stability and monthly expenses.

2. Starting Small

If saving several months’ worth of expenses seems daunting, start small. Even setting aside a small amount each month can make a big difference over time. The key is to start now and build gradually.

3. Automating Savings

One of the easiest ways to build your emergency fund is to automate your savings. Set up automatic transfers from your checking account to your savings account. This way, you’re consistently contributing to your fund without having to think about it.

4. Cutting Unnecessary Expenses

Take a close look at your budget and identify areas where you can cut back. Reducing non-essential spending, such as dining out or subscription services, can free up money to put towards your emergency fund.

5. Using Windfalls Wisely

Whenever you receive unexpected income, such as a bonus, tax refund, or gift, consider putting a portion of it into your emergency fund. This can give your savings a significant boost.

6. Choosing the Right Account

Keep your emergency fund in a high-yield savings account. This type of account offers better interest rates than a regular savings account, helping your money grow faster while still being easily accessible when you need it.

Building an emergency fund takes time and discipline, but the peace of mind it provides is well worth the effort. Start today, and you’ll be better prepared for whatever financial challenges come your way. At Peoples Bank & Trust, we’re here to help. Learn more about our savings accounts and other services that can help you effectively build your emergency funds.

piggy-bank

How to Start Building Your Emergency Fund

Not only does having an emergency fund give you a peace of mind, but it can help you avoid the stress of being in debt. The best time to start building your emergency fund is now! If you’ve heard all about the importance of having this fund but aren’t sure how to get started, keep reading. 

Set a Goal 

The first step to building your emergency fund is figuring out how much you want to save. There are emergency savings calculators online that can help you figure out a smart amount to aim for. This amount will vary depending on many factors like how many people you’re providing for, what you pay for monthly, if you’re paying off debt, etc. 

Break Down Your Goal 

Many times your total emergency fund goal can be a large and intimidating number. Breaking the total down into monthly goals is a great way to ease the pressure while still accomplishing your goal on time.  

Set Up an Automatic Transfer 

The easiest way to make sure your monthly goals are being met is to have a designated amount transfer to your savings account. Your bank can set this up so you don’t have to worry about setting aside money since it does it automatically. Having an automatic transfer set up will make it feel like you’re not losing any money at all. 

Save the Change 

You might not think keeping your change for your emergency fund would make a big difference, but it sure adds up. Start keeping the $1 and $5 bills you get back when making purchases and putting them in a jar to add to your emergency fund. 

Make Adjustments 

As time goes on and your emergency fund grows, you might need to make some adjustments to how much you save every month or your goal amount. These things may need to change over time as your financial situation changes, so don’t be afraid to make proper adjustments. 

Having an emergency fund can be a life-saver when issues you weren’t expecting come up. Give yourself some peace of mind by starting to build your fund today. Contact Peoples Bank & Trust with any questions you have or if you’d like to learn more about our services. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

piggy-bank

How to Rebuild Your Emergency Fund

It finally happened – you had to spend your emergency fund. The good news is you had a fund, but the bad news is you spent it. Where do you go from here and how do you rebuild what you had? We wanted to offer some insight on ways you can begin to rebuild your emergency fund for the next rainy day.

Say ‘Bye’ To The Unnecessary 

That gym membership and extra show subscription will have to be canceled for now. You can get by without, as saving for the next emergency is more important than having Netflix, Amazon Prime, Hulu and HBO all at once. Find the right balance though, as it’s still okay to treat yourself every once in a while with a small expense.

Put Other Goals On Hold

If you were hoping to renovate your home or go on a big vacation, you still can, but maybe just wait a little. All that savings you were adding to that fund could partially be transferred into your new emergency account. It’s important to stay prepared, as you never know when the next disaster might strike.

Get A Side Gig

Acquiring another job can be very beneficial for making money quick. Use your marketing skills to do some work for clients on your own or wait tables for a few months. This will help you get back on track before you know it. Tutor, give music lessons, babysit, pet sit, dog walk or design wedding invitations – whatever your skills or availability, you can find a side gig that works for you.

Start Saying ‘No’

You don’t have to turn down every opportunity, but try to say ‘no’ here and there while rebuilding your funds. Should you be spending money on eating out if you already did it once this week? No. Should you spend money on a new outfit or tickets if you already treated yourself this month? No. Be a little more stingy while saving again, as it’ll come in handy the faster you replenish your fund if something happens suddenly.

Sell Something

You have plenty of clothes and decor that are no longer of use to you. There are probably old electronics lying around as well that you don’t use anymore. See what you can sell online or bring to a thrift store for a couple of bucks. You’re decluttering and adding money to your account – we couldn’t be more proud of you! 

Don’t let this minor setback discourage your financial independence. You were well-prepared by having your first emergency fund in place, so now it’s time to make the next one bigger and better than ever. If you’re looking for a great place to store that rainy day fund, our savings accounts are always available for you!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

emergency

3 Questions to Ask Before Using Your Emergency Fund

Emergency Fund

If you’re new to budgeting, we recommend having a $1,000 cushion to help offset the cost of an emergency expense without it derailing the rest of your budget. If you aren’t able to put the $1,000 aside now, start small and work your way up to a number that is comfortable for you.

When is a financial emergency, truly an emergency? Establishing an emergency fund is an incredibly important part of your budget, but knowing when to use it is just as important. Ask yourself these three questions before dipping into the pot:

  • Is it unexpected?

Unfortunately, life can hit us with some difficult challenges that result in significant financial hardship. These are the situations in which use of the emergency fund is acceptable. This could be an unforeseen medical expense, like a child’s broken arm. Or, maybe you lost your job and will need some help getting the bills paid until you find new employment.  These type of events are unexpected and difficult to plan for, as you hope you will never have to face them. What would not be “allowable” is using the EF (Emergency Fund) to pay for expenses that you know are coming each month, such as a cable or utility bill.

  • Is it urgent?

The word emergency typically implies immediate. For example, if you have a sick loved one who needs you across the country, it won’t do them any good for you to wait until you have saved up enough money to visit. They need you now and it is reasonable to use the EF to get there.

  • Will it fulfill a need?

For many, it can be tempting to spend the large amount of money accumulating in your emergency fund. But this is where you need to truly consider needs vs. wants. For example, let’s say your dishwasher broke. Of course, this is not ideal and can make your life more difficult, especially if you have many people in your household.  However, it wouldn’t be categorized as a need. You can wash dishes by hand and start saving for a new one. But, if your dishwasher broke causing water damage to the cabinetry, this would qualify as an unexpected and urgent need to take care of as soon as possible.

If you’re looking for a safe place to keep your emergency fund, allow us to help it grow a little by placing it in a savings account with us!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

10 Financial Resolutions for 2017

Money Management

A new year brings exciting opportunities along with the promise of a fresh slate. Start 2017 off on the right foot with these 10 tips from Peoples Bank & Trust Co.:

  1. $1,000 Emergency Fund. Did you know most Americans do not have the savings needed to cover unexpected expenses or bills? By accumulating a decent emergency fund you have the potential to continue saving instead of withdrawing money from your monthly budget for each unplanned expense. Experts say to start with $1,000 and slowly work your way up to a three to six months’ salary of savings.
  2. Maximize Your 401(k). Employers who offer a 401(k) benefit often supplement it by matching a percentage of contributions. To take advantage of their FREE matching, start by contributing at least three percent of your income. Over time, increase it to the maximum amount. These funds will continue to grow over the coming decades and help you to build a well-rounded retirement plan.
  3. Start Saving in an IRA. Similar to the 401(k), an IRA is a great way to help you save money for your retirement. These accounts are not typically provided by your employer, but can be started through a bank or financial adviser. There are two options to choose from: A Traditional IRA  or a Roth IRA. A Traditional IRA will allow you to contribute pre-tax dollars and pay taxes upon receiving distributions at age 60. A Roth IRA will let you contribute post-tax dollars, but you don’t have to pay taxes when you receive distributions after age 60. Both options have a limit to how much you can contribute each year, so start with an affordable amount, and slowly work your way up to the maximum.
  4. File Your Taxes Early. Before the end of the year, every employee should receive their tax forms from their employers. With this information in hand, you can make an appointment with your local tax professional to determine your maximum refund. These funds can then be allocated towards paying down debt, contributing to your IRA, or deposited in your growing savings account.
  5. Save for Your Child’s Education. Children learn a great deal from their parents. Show them how to save, and get them involved with saving for their own education. By making automated transfers each month, you can ensure that you will have a designated amount to invest in their future. By incorporating this into an account like a Coverdell or 529 Plan, you can help these funds grow tax free. They can then be used for educational expenses like tuition, books, or computer equipment.
  6. Pay Off Your Credit Cards. Credit cards are notorious for having sky high interest rates. By paying off your debt quickly, you can save money. To help, our convenient calculator can determine how much you need to allocate each month for a debt-free 2017.
  7. Switch to a Community Bank. Community banks like Peoples Bank & Trust offer impeccable service without the hassle of unwanted fees. Staffed with experienced financial professionals, we have the tools to help you achieve your next financial goal.
  8. Save 10 Percent. Between your retirement, your child’s education, and your emergency fund, you should be covered for most of life’s unexpected expenses. While it’s great to save for the unexpected, having a fun goal to aim for makes the process more exciting by giving you a tangible experience to look forward to.
  9. Monitor Your Credit Score. One of the easiest ways to let your credit score dip is to forget about it! Comprised of payment history, number of accounts, and several other factors, one loose bill has the potential to compromise your entire score. The one federally authorized FREE credit reporting site, annualcreditreport.com, allows every American to have one copy of their credit report from all three reporting bureaus. This is a great tool to use annually; however, each month it is a good idea to check and see if there have been any changes. Many credit cards are now offering a service for this to help their consumers keep on top of their score.
  10. Create a Monthly Budget. Hands down the one change you can make with the biggest impact on your personal finances is to create a monthly budget. By allocating every dollar you earn to a role each month, you can ensure no money is wasted. This will also help you gain better insight into where you’re spending your funds giving you additional opportunities to find savings.

By accomplishing each of these goals in the New Year, you will complete the basic steps to attaining better personal finances. With the help of our dedicated team, you can begin today. Stop by one of our locations and see what your first step could be!

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

How to Create your Emergency Fund and When to Use It

savings

Creating a structured savings plan is one thing that can set apart the financial dreamers from the financial doers! By setting strict guidelines to your goal, and ensuring the correct follow through with a backed up savings plan, you can be certain of your success in accomplishing your future achievement! One of the biggest obstacles in these plans is the unforeseen, and there is a way to manage even that. Using a well-rounded emergency fund can ensure that you don’t dip into saved funds for unexpected costs such as auto repairs, or medical emergencies. Want to get started setting up your emergency fund today? Follow these simple steps and you’ll be on your way to financial success!

  1. Open a dedicated savings account.
  2. Deposit Funds each month without withdrawing anything.
  3. Start by saving $1000.

– Next save 3 months’ worth of income and expenses.

– Finally maintain 6 months’ worth of income and expenses.

The reason you have this fund is simple, to prepare for the unpreparable. Whether it’s an unanticipated job loss, a costly home repair, or other unplanned expenses, your emergency fund can help you stay afloat when the waters get rough.

The main objective of this account is to have it work for you and your needs! By specifically determining what you define as an emergency (job loss, vet bills, auto repairs) and what doesn’t (last minute birthday gift, broken TV, new clothes) you can generate a structured list to know when you feel safe using those funds, and when perhaps its best to leave them untouched. The idea of the emergency fund is to have it when you need it. By gaining access easily via checkbook or debit card, you can use the account more quickly when the unexpected strikes.

By generating your own emergency fund you can continue to save for milestones and pay bills, without worrying about the what if’s that lie along the road to the future. Get started with your emergency account today at Peoples Bank & Trust, we’ll help you get to your next savings goal!

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC