Develop saving strategies for an emergency fund

You know you need to save money for emergencies and you now have savings goals. It’s time to get busy saving. There are several common strategies to build your emergency fund, including:

• Create a spending plan. Gain control of your financial life by pacing your spending to meet your financial goals. Watch the video on Budgeting Basics Links to an external site. and then use the CashCourse Budget Wizard Links to an external site. to create your individualized spending plan.
• Make your emergency fund a priority. Think of emergency savings as a necessity. Decide it is possible to save and make it a line item on your spending plan.
• Plug your spending leaks. Even minor purchases, like coffee or snacks, add up and ultimately reduce your ability to save. Watch the Tips for Saving Money Links to an external site. video and then use the Value of Reducing Expenses calculator to see what your savings could add up to over time. Every little bit counts. Take advantage of coupons and rebates.
• Pay yourself first. Make sure your savings goals come before impulsive spending. Ask your employer to deposit part of your paycheck directly into your savings.
• Use windfall money. Set aside tax refunds. Deposit raises, bonuses, inheritance and gifts. If your spending levels were fine before the windfall, put the extra cash into savings.
• Get a job. Make extra money for savings by working on campus or in your career field.

Keep your emergency fund money in an account where you can easily access it when you need it, but not so easy as to tempt you to dip into the funds. Investment accounts or other savings vehicles like certificates of deposit (CDs) are not ideal because they carry risk and/or keep your money tied up. Consider using an easily accessible money market account or savings account at a local bank or credit union.

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