What is an emergency fund exactly? Why do I need one? Those may be two of the questions any #FirstTimer may have once they are financially independent.
An emergency fund is the cash you've saved up for the sole purpose of helping you through an emergency. You shouldn't touch the emergency fund at all until you actually need it, so place it into a separate savings account and watch it grow while earning a bit of interest.
Here are a few tips from The Simple Dollar that can help #FirstTimers make the act of creating an emergency fund less daunting:
- Set your initial target low. Most people start with a goal that seems impossible to reach. An emergency fund can have any amount of money; even $250 can make a huge difference during an emergency. The smaller your weekly savings goal, $10-$20 a week, the easier it is to build the fund.
- Request a rate reduction on your credit cards. Many credit card companies will honor requests made to lower your rate. You just have to make the call! Ask to speak with the supervisor and simply request a rate reduction.
- Shop around for better auto and home insurance. Visit insurance companies' websites, get some quotes and shop around. Unity One members are eligible for discounted insurance through Liberty Mutual. Call Tracy McNeil at 817-337-3606 ext. 08650 to receive your free quote.
- Install a programmable thermostat. The key here is to actually use it. Set it so the air conditioner and/or heater doesn't run when your not there. This can cut your bill by 20-30 percent.
- Make a list for grocery shopping. Ten minutes of planning could easily save you money by keeping you focused on the stuff you actually need.
Follow Unity One on Twitter @UnityOneCU for more updates to our #FirstTimers series.