What is an Emergency Fund?

Emergency Fund

Do you have an emergency fund? Picture this. Your car broke down this weekend. It’s going to cost a pretty penny to get it fixed but you don’t get paid until next Friday and you’re strapped for cash. You need your car as soon as possible to get to work on Monday. Where are you getting the money to cover the urgent repairs?

Before your blood pressure gets any higher, let me introduce you to my little friend, the emergency fund.

To quote The Alight Blog, an emergency fund is “a separate pool of money designated specifically to cover or offset expenses associated with an unforeseen situation.” The car broke down, a medical emergency occurred, you got laid off. An emergency fund is there to prepare for these events BEFORE they happen so you don’t have to scramble and stress about money when they do.

Sounds good! How do I get started?

Starting an emergency fund is easy to do, especially with 1166 FCU, but let’s take a moment to think practically about what an emergency fund might look like for you.

Think practically

The amount of money you should dedicate to your emergency fund varies from person to person. For example, a part-time worker with a family to support is likely going to save differently than a person with a full-time job and no kids.

Decide on a savings goal

Set practical goals that fit your budget and begin with small saving targets. We suggest saving enough to cover three to six months of living expenses, but start out saving up to cover one month or two weeks. Refer to your budget and see what regular contribution you can make, whether that be $100 a month or $50 a paycheck. The amount will change depending on your life circumstances, but any contribution is helpful.

Stick to your goal. While the process may seem slow, future you will be extremely grateful for the steps you take now.

Get started

Contact us to create an emergency fund with 1166 FCU today!

Contact us

Browse our website for more information or contact us at (856) 542-9241 to speak to a member of our team.