Save: Save for emergencies and be prepared for opportunities

It’s not a matter of if, but when an emergency will arise. Having an emergency fund can reduce stress, prevent your having to liquidate retirement savings, and avoid interest on emergency credit card debt or loans.

Watch our workshop on Saving for Emergencies

Create the habit of saving for emergencies

Begin by setting up a direct payroll deposit into a separate savings account. As a rule of thumb, your ultimate goal should be to have at least 3 to 6 months of living expenses saved. Start gradually by setting interim goals of $500 and $1,000. Plan to leave the money in emergency fund and only withdraw it for emergencies. Bank, credit union, or online savings accounts are usually the best vehicle for saving in your emergency fund.

Determine how much you can save

Use one of these resources to determine how much you can contribute per paycheck

• Go to our Saving for Emergencies calculator
• Go to www.practicalmoneyskills.com's Emergency Fund Calculator.

After setting up your savings account, find your Core Financial Principles Task Checklist and check off “Save for emergencies."

Resources

• Request a consultation with a financial planner
• Core Financial Principles Task Checklist: a form for keeping track of your progress
• Core Financial Principles workbook: a booklet that teaches financial planning principles
• Suggested websites and readings.