Oh SNAP: Building an Emergency Fund | OneUnited Bank

We’ve all heard how important it is to have an emergency fund in some easily-accessible account to cover our living expenses for three to eight months in case we lose our jobs or otherwise can’t make our payments. Wait, hold up! Three to eight MONTHS of living expenses? That’s a whole lot of money! For most of us, the idea of saving that much cash in for a rainy day fund seems so unrealistic that we don’t even try – but you can do it –x it really is possible! Here’s how.

Set Smaller, More Obtainable Goals

Even though the personal finance and get-out-of-debt experts like Dave Ramsey and Suze Orman preach the importance of having an emergency fund big enough to cover all of your normal living expenses for a long period of time – up to eight months even – you can’t get there overnight. Knowing that it will forever to save up that much cash is overwhelming. Instead, make a smaller, more obtainable goal.

Decide you’re going to set up an emergency fund with an achievable goal, like $300 or $1,000. This goal should be something you can reasonably accomplish. Maybe you don’t have extra money lying around to get it started, and that’s ok! Just set up a plan to save $10 or $100 a week, whatever you can comfortably afford, until you reach that initial emergency fund goal so you’ll have money whenever life throws a curve ball.

Maybe you’re sitting there thinking you don’t even have an extra $10 a week to save. Okay, if that’s true, you’ll have to make a few lifestyle changes to “find” the money, and invest in yourself.

Finding Money to Save

If you’re living paycheck to paycheck and running out of money before the bills are paid, you’re going to have to take action to improve your situation. An emergency fund may seem out of reach, but if you have some money set aside you won’t be thrown into a panic every time you need an unexpected car repair, have to pay for something at the kids’ school, or need to take care of a medical bill.

Invest in your future by taking action to improve your financial situation right now. Start by calling your credit card companies and asking for a rate reduction or lower monthly payment. If you haven’t done this before, you’ll be surprised how easy it is to get a lower payment. Any money you save by making these calls can be stashed into your new emergency fund.

Instead of going to the grocery store without a plan, take ten minutes and plan out what you need for the week and then stick to it. You may save $10 a week or more on your groceries simply by cutting out unnecessary purchases. If you’re getting take out or going to restaurants regularly – cut back a notch. Put the savings in your emergency fund.

Take a look at everything you pay on a monthly basis for potential areas to save. Maybe you can change your cell phone plan. Maybe you can carpool or use public transportation. Maybe you don’t need satellite or cable tv and Netflix or Hulu. Just look closely and find a few places to trim costs and apply those savings to your emergency fund.

Make Your Savings Automatic

When you “find” that extra money in your budget you’re going to be tempted to spend it on something more fun than saving in your emergency fund – so here’s what you should do. Set up a UNITY Visa Savings Account at OneUnited Bank, and transfer your emergency fund savings automatically each week or month, so you aren’t tempted to spend it.

Once the money is transferred – forget that it’s there! Until you have an unexpected expense or emergency, that is. Then you can use it. That’s what it’s there for. Every time you use your emergency fund, just get right back to saving to replenish the funds.

Grow Your Emergency Fund

Once you reach your first goal of $300 or $1,000 (or whatever you decide), don’t stop there! Set a new goal to increase your emergency fund at OneUnited. Wash, rinse, and repeat! Before you know it, you’ll have several months of funds saved to support you in the event of an emergency.

OneUnited Bank

Our community’s dream is now a reality! OneUnited Bank is fulfilling the hundred year old civil rights dream by garnering the savings power of our communities and channeling it back into urban communities for economic development. With your support by simply opening an FDIC insured account with great rates, we will continue to accomplish this dream everyday!

  • Badi Bukas-Yakabuul
    This is life lesson to learn very soon and has positive consequences even if it is applied late in life.
    June 30, 2017 Reply
  • Lorenzo Garner
    Do you think it's better to try and pay off as many bills first then try to save And what do you think about investing in tax sale property as an investment compared to a savings account.
    July 1, 2017 Reply
    • W.E. Jarrett
      Hello Lorenzo, Love the question. I do not represent OneUnited, but I may have some insite for you. In my opinion, you should save $500-$1000 for emergencies first, then start on your debt. If you reverse the order, if an emergency comes up, you are then going to go back into debt to handle the situation. In regards to tax leins, I would concentrate on eliminating all debt (except maybe primary mortgage) first. Tax leins, as with any investments, can be very risky, and without a good financial foundation, it is best to control the things that you can like your debt. Hope that helps.
      November 29, 2017 Reply
  • Cine
    Wonderful! So happy to have found this webpage. So needed. Such a blessing! Thank you
    July 19, 2017 Reply
  • Kimberly Trent
    I am so Blessed to have found this bank and its just for me in the past I've had many problems with other banks because of my lack of financial understanding but id love the general idea of saving for rainy day and I should have been set up an emergency account and have been for the longest but life got in the way and I can't afford to invest in myself so this year its all about me saving to make my dreams happenI am currently on a fixed income but slowly improving in this are OF MY LIFE I'M ON IT NEXT MONTH FOR SURE
    January 24, 2018 Reply

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