Are you and your spouse starting an emergency fund? My husband and I used to have a very nice one and then I became unemployed and ran out of unemployment pay. While being unemployed, I have tried many different ways to make money: freelance design work, eBay selling, blogging, and freelance blogging work. I am starting to make more money, but it has taken quite a lot of time and effort. Meanwhile, our emergency fund has dwindled. Now we need to start building it back up again.
How much money do you need in an emergency fund?
Deciding how much you need can be difficult. If you search the internet, you will find some people say to save 3-6 months of your current pay and others will say you can need as much as 1 year of your salary put away. How much you decide on can be a personal decision that requires thinking about many different factors. I suggest reading up and discussing with your spouse to determine the amount that will give you both financial peace of mind.
Tips for starting and building an emergency fund as a couple
Once you have determined the amount you would like to save, you may feel overwhelmed. You most likely aren’t going to be able to save this amount in 1 year. So, relax and take baby steps. Here are some tips that have helped us in the past, and will continue to help us build our new emergency fund:
- Open a savings account that gives you a bonus. During Capital One 360’s Black Friday Sale you can open a 360 savings account and get $100. That would be a nice way to start your saving!
- Choose a set amount to save from each paycheck. Again, pick a number that you feel comfortable with – maybe 1 or 2 less times of going out to eat during that pay period? $50-$100 per paycheck could be feasible.
- Direct deposit the amount in #2. If you don’t see the money in your checking, you won’t spend it. Have the money deposited directly into your emergency fund savings account.
- Set a budget and stick to it. If you don’t already have a set budget, sit down and make one. After you both agree on the budget, you BOTH need to agree to stick to it!
- Save at least half of unexpected money. Whether you get a bonus at work, a tax refund, or win money in Vegas, automatically put at least 50% of that money in your emergency fund savings account. When we had a healthy emergency fund, we would divide unexpected money as follows: 65% extra on mortgage, 25% extra on a personal loan we have, and 10% into savings. Now we have changed it to 65% into savings, 25% on mortgage and 10% to the personal loan.
- Open accounts that are fee-free. Don’t waste money by paying fees on your checking and savings accounts. Capital One 360 Checking and 360 Savings are fee-free and earn interest. As I mentioned in #1 above, during Capital One 360’s Black Friday Sale you can open a 360 savings account and get $100… the same goes for the 360 Checking account!
- Look for referral bonuses and start referring! Many credit cards, cable/internet providers, cellphone services and banks offer referral bonuses. Start sharing your referral links with your friends in email, and on social media. Any money you earn should go straight into savings.
- Make some small changes to the way you spend and deposit any money you save. Here are some ideas:
Do you have an emergency fund? How did you build it? Any tips for starting an emergency fund? We’d love to read them, so comment below!
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.