Emergency Savings Fund
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From suddenly falling in love and planning a wedding to unexpectedly losing your job, you’re bound to be surprised by something, some day. And every financial plan should include an emergency savings fund to help you handle that surprise.
Financial planners typically suggest having three to six months of living expenses set aside. That’s based on the average time it takes to find a new job. During the recent recession, it took much longer, so some advisers are now suggesting more.
If you have enough emergency funds to cover six to nine months of living expenses, an unexpected event is less likely to disrupt your long-term financial goals.
Set a goal for how much emergency savings you really need to get through a crisis and work toward that. Don’t stop saving for retirement or paying down credit cards, just save whatever you can.
Try one of these Fifth Third savings tools to help you get there faster.
Earn points for the things you buy every day, like gas, dining out and groceries. Then, redeem your points for things you would otherwise spend money on during your time of need. This will free up some cash for your emergency savings fund.
Always remember that credit cards can charge interest. So be cautious about overusing your card(s) and adding to your overall debt.