Everything You Need To Know About Emergency Funds [Infographic]
How much do you know about emergency funds?
Having an emergency fund is one of the most important ways to protect yourself and your family. Unfortunately, 40% of Americans don’t have enough saved to cover a $400 emergency. Even worse, 25% of Americans have no emergency savings at all!
If you are just getting started on your financial preparedness, you may have many questions. This emergency fund infographic answers the most important questions about emergency savings.
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About This Infographic
An emergency fund is money you set aside to deal with large, unexpected expenses.
An emergency fund creates a financial buffer against events like a car repair, home repair, illness, or job loss.
You should aim for three to six months of expenses in an emergency fund. However, this can vary based on factors like your family, job, health, and location. Take the How Much Should You Save In Your Emergency Fund Quiz to find the best amount for you!
The best place to keep your emergency money is somewhere separate, liquid, and accessible–but not too accessible. Options include a high-yield savings or money market account.
Use your emergency fund effectively by being deliberate with how you spend it. Only use the money when events are unexpected, necessary, and urgent.
- Determine your savings goal
- Maximize your resources by trimming your budget
- Transfer any existing savings to jumpstart the process
- Calculate your monthly plan
- Set up an automatic transfer to your savings
- Boost your savings with any unexpected windfalls
- Stay accountable by tracking your progress
- Look for ways to stay engaged and motivated