
You can save up for many types of things - vacations, cars, homes, and more - but it's most important to have money saved in case of an emergency.
Emergency savings should be easily liquidated, which means that you can withdraw the cash quickly if needed. You don't want it invested or stored in an account designed for long term use.
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Common Uses
Some common reasons that people have to use money from their emergency savings include:
Sudden job loss
Unexpected illness or injury
Expensive medical bills
Unexpected home or car repairs
Replacing damaged or stolen expensive items
Replacing damaged or stolen expensive items ( like computer or phone)
BIG TIP: If you end up having to dip into our emergency savings try to replace the money as soon as you can.

3-6 Months of Savings
Emergencies are unpredictable, so how can you decide how much to put aside?
Experts recommend having 3-6 months of expenses set aside for emergencies
How much that is exactly will vary by individual. It will depend on your monthly expenses which are based on various factors.
Calculating Your Savings Goal
Let's start by thinking about your monthly expenses. This includes things like rent, utilities, groceries, insurance loan payments, and other necessities in your budget.
Tally those up and multiply by 3 - this is the starting goal for your emergency savings account balance.
Don't worry if you don't have all the money to deposit today, that is why it's called emergency savings. Because you have a goal to save 3-6 months of expenses. Just be sure to stash something away weekly, bi-weekly, or monthly to your emergency savings account. Growing your savings is something to work towards.

Monthly Contribution
While building up your emergency savings should be a top priority, we know it's not always possible to do immediately depending on your financial circumstances.
How much you can afford to save each month will depend on your income, the cost of living in your area, if you have any loans or debt you are actively paying off, and your normal everyday operating expenses for your household.
Your goal should be to contribute a realistic amount to your emergency savings each month.
Consistency will be key here, even if the monthly contribution amount is low, it will add up over time and you can slowly increase it. From personal experience, many start with $5 a month or week then after 3 months, raise it to $10, the more you can stash away the better and as you slowly increase you'll notice you didn't even miss that extra money or that you spent it on something that wasn't worth saving for your future.

Calculating Your Contribution
In order to set a realistic goal, let's figure out how much money you have left over each month. To do this, simply subtract all of your necessary expenses from your monthly take-home income.
You should plan to use some of what's left over, (commonly called "fun money") for stuff like dining out, clothes, going to the theatre, concerts, etc. treat yourself!
Then decide how much you can comfortably afford to set aside for emergency savings. Experts recommend saving 20% of your monthly income into savings. This includes emergency savings and retirement savings.
Automating Your Savings
If you want to set and forget sending money to your savings account, you can use recurring transfers to that your bank will automatically send money to your emergency savings. You are usually able to setup the recurrence (weekly, bi-weekly, monthly, custom)
You choose the amount, how frequently you want it to happen (monthly is the most common, or when you receive every paycheck) and which day of the month you want the money sent.
This is the best way to put your savings on auto pilot! Set it and forget it! You can always adjust and skip if necessary or you need funds that week/month for anything.

How To Automate Your Savings
Log into your bank account where the money is coming from
Select the option to make a transfer
Choose where you want the money to go, which is your emergency savings account. If it's at a different bank, you'll need the account number and routing number.
For a different bank you may have to also verify trial deposits.
Input the amount you want to transfer
Click the option for recurring and input the frequency
Press submit! You're all set now!

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The Holding Tank
Savings accounts are a great storage facility for your money. From these accounts, you can transfer money to your checking account to pay bills, or transfer money to other savings plans for different types of storage if you need to.
Some banks may have a maximum number of transactions that the bank will allow for free (usually somewhere between 3 and 6). Keep an eye out for this in your account paperwork.
You don't want to transfer back and forth, you really want to keep any withdrawals from your savings to other accounts at a minimum and used for emergencies only.
If you occasionally exceed the limit, your bank may decline your excess transactions or charge you a fee. If you exceed that limit often, some banks may convert your savings account to a checking account or close it altogether.

Saving vs. Investing
Depending on your goals and where you are financially will determine if you should save money or start investing. Investing will earn you a higher rate of return on your money. Below is a snapshot of if you should save or start investing. We also have a quick video that will explain the benefits of getting into a position to invest your money. Saving
Earn lower return on your money
Access cash within 24 hours
You are building your emergency fund
You are focused on paying off large debts
You need access to money for car and/or home repair within 1 year
Investing
Earn higher return on your money
Access cash within 1-3 business days
You have an emergency fund
You have manageable debt that does not affect your cash flow
You have excess cash you'd like to put away for 3 or more years

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