Wednesday, March 30, 2016

5 No-Nonsense Tips For Building A Strong Emergency Fund

Life is unpredictable. While things may seem stable now, it is impossible to accurately predict what the future will bring. In order to be prepared, every household should ideally have an emergency fund in place to cover necessary expenses for about six months without any income. However, Market Watch states that 61% of Americans have less than $1,000 in savings. This is barely enough to cover one month without income, much less six. Market Watch goes on to reveal that 21% of Americans don't have any savings account whatsoever.

If you are one of the hundreds of Americans struggling to build an emergency savings fund, First Bank of the Lake is here to help. Here are a few no-nonsense tips for building an emergency fund.

1. Set Up A Budget
There's a reason why almost every blog that provides tips for improving your financial habits includes this suggestion. Tracking your finances with a budget or spending plan is the best way to see exactly where your money is going on a weekly or monthly basis and where you can afford to cut back. When you build your budget, include a monthly allotment to set aside in an emergency fund.

2. Treat Your Savings Account Like Another Bill To Pay
The biggest struggle people face when building an emergency fund is finding the will-power to set money aside instead of spending it. Changing your mindset may be helpful. Instead of thinking of your savings account as leftover money, treat it like another bill you have to pay - the only difference is that it will go into a different account in your name, rather than a third-party account.

3. ONLY Use Those Funds For Emergencies
Make your account live up its name by only using its funds for emergency expenses that arise without warning, such as a broken refrigerator or a blown transmission. Predictable expenses like insurance and utilities do not count as emergencies - and neither do limited-time offers at your favorite department store.

4. Start Small
Don't put off starting a savings account simply because you cannot afford to contribute much to it right now. Even if you set aside as little as $50 per month, you'll have $600 at the end of the year. Something is better than nothing. Start with whatever you can afford, and increase your amount as you can.

5. Save Excess Income
Every so often, you may come into an unexpected influx of cash, such as a tax refund or unusually large commission check. This is very exciting and has the potential to be enormously beneficial, but it won't be if you blow it in the first month. Any time you come into excess income, put that money into your emergency fund.

Set Up A Savings Account At First Bank Of The Lake
Many people find it helpful to open a separate bank account for an emergency fund. By keeping your emergency fund separate from the checking/savings accounts you use every day, you won't be able to see it as part of your available balance. If you are thinking about setting up a bank account at the Lake of the Ozarks, we hope you'll consider First Bank of the Lake. Visit our website for more information about our savings accounts in Osage Beach MO.

First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

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