Tips for Starting an Emergency Fund

An emergency fund is money set aside to cover unexpected expenses, like a car repair, medical bills, or job loss. Having one gives you peace of mind and helps you avoid debt when life throws a curveball. Here’s how to start building yours.

Choose the Right Account

Your emergency savings should be easy to access. A PSECU money market account is a smart choice! As long as your balance is above $500, you’ll earn more interest than with any other savings share - and you can easily access your funds whenever need them.

When choosing a money market account, look for:

• No monthly fees.
• Dividends paid regularly.
• Anytime, anywhere accessibility.
• Low minimum balance requirement for higher dividends. 

Calculate Your Needs 

Most people aim to save at least six months’ worth of living expenses. It may take time to reach that goal, but consistent contributions - weekly or monthly - can get you there.

Start by adding up your monthly expenses, including:

• Mortgage or rent.
• Utilities (gas, water, trash, sewer, electric).
• Internet & cell phone.
• Insurance (auto, health, life).
• Transportation (gas, public transportation).
• Groceries.
• Other expenses, including medications, monthly gym memberships, subscriptions to audio or video streaming services, and other recurring costs.
• Monthly debt payments (student loans, credit card debt).

Find Ways to Save and Contribute

Small lifestyle changes can free up money to funnel into your emergency fund. Try:

• Turning off lights when you leave a room.
• Adjusting your thermostat by a degree or two.
• Choosing generic brands at the grocery store.
• Signing up for store loyalty programs.

You can also boost your savings by selling unused items - like clothes or household goods - at a yard sale or online. And when you receive financial windfalls, such as tax refunds, consider depositing them directly into your emergency fund to accelerate growth.

Stay Consistent

Consistency is key. Build emergency savings into your monthly budget by making small sacrifices—like skipping one dinner out or movie night. These changes add up and give you room to contribute more.

To make saving effortless, automate your contributions. Set up your checking account to transfer money into your savings share each month. This way, your emergency fund grows steadily without requiring extra effort.

Peace of Mind Starts Here

Having an emergency fund helps you handle life’s surprises without financial stress. For more money-saving tips and tools, visit our resource center.