Handling Unexpected Circumstances
Unexpected adverse events can have a significant strain on your financial well-being. Planning and putting an emergency fund into place can help alleviate that burden.
What is an Emergency Fund?
An emergency fund is money you've set aside that you only use in the event of a financial emergency.
What constitutes a Financial Emergency?
Any unexpected event that places significant financial strain on you or your family could be considered a financial emergency.
Some examples include:
An expensive car repair
An unexpected medical emergency
A death in the family
An emergency home repair
The loss of a job
An illness or injury
Not every unexpected circumstance is an emergency. You'll need to determine what does and does not constitute a financial emergency. You should only spend your emergency fund on real financial emergencies for it to function effectively.
How much money is enough for an Emergency Fund?
Every situation is different, and it's hard to put any extra money away on a tight budget. When it comes to putting together an emergency fund, every little bit helps. Saving a full month's rent is a great starting goal-you can build on this goal by going through your past emergency expenses.
Where should I store my Emergency Fund?
There are three key things to keep in mind when deciding where to store your emergency fund:
It needs to be secure
It needs to be accessible when you need it
It needs to be in a place where you won't steal from it
Savings Accounts
Greater Kentucky Credit Union offers excellent, free savings accounts that are perfect for building up an emergency fund.
Free Checking Accounts
A checking account can also be an excellent option for storing your emergency fund. It allows for easier access to those funds when you need them. Greater Kentucky Credit Union offers free Kasasa checking accounts that pay you every month.