Emergency Funds: How to Save for Unexpected Expenses

We understand that saving can be challenging, and unexpected events can strain your finances. However, with a little planning, you can be better prepared for those rainy days. At Bank of New Hampshire, we’re here to help. Below are some tips to help you build an emergency fund and avoid financial stress during unforeseen circumstances.

Start an Emergency Fund

Consider setting aside a certain percentage of your paycheck into an emergency fund. This practice not only helps you become a more effective saver but also ensures you have a cushion for unexpected expenses.

Add a Miscellaneous Column to Your Budget

If you’re not already budgeting, now is the perfect time to start. Allocate every aspect of your income, including a column for miscellaneous expenses. Even small contributions to this category can accumulate over time, providing extra funds when you need them most.

Cut Unnecessary Expenses

Review your budget and identify areas where you can cut back. Whether it’s a subscription you rarely use or dining out less frequently, reducing unnecessary expenses can free up money to save for emergencies.

Set Aside a Little Every Paycheck

Regularly saving a small amount from each paycheck can build your emergency fund over time. Consistent contributions, no matter how small, can make a significant difference.

Open a Separate Savings Account for Emergencies

Having a dedicated savings account for emergencies can help you avoid the temptation to dip into these funds for non-emergency expenses. This account should be easily accessible but separate from your everyday spending account.

Set Up Automatic Transfers

Automating your savings is a hassle-free way to ensure you consistently contribute to your emergency fund. Set up automatic transfers from your checking account to your emergency savings account to make saving effortless.

Use a Monthly Savings Builder

Consider adding a specific amount each month for potential future expenses, such as car repairs or medical bills. For example, setting aside $20 a month can accumulate over time, providing a buffer for unexpected costs.

Review Your Plans Regularly

Regularly review your financial plans and anticipate potential expenses like medical bills, car repairs, or home maintenance. This foresight can help you better prepare for unexpected situations.

Maintain a Good Credit Score

A good credit score can be a valuable asset in emergencies, helping you qualify for loans with favorable terms. Stay on top of your credit to ensure you have options if you need financial assistance.

By taking these steps, you can build a robust emergency fund and gain peace of mind knowing you’re prepared for whatever life throws your way. At BNH, we’re committed to helping you achieve financial stability and security. For more tips and resources, visit our BNH Blog or contact us today.