How Military Families Can Save $500 to $1,000 for Emergencies
Maintaining an emergency savings account may be the most important difference between those who manage to stay afloat and those who sink in debt. An emergency fund consists of a small amount of money, usually in a savings or share account, that you do not have easy access to. Keeping $500 to $1,000 of savings for emergencies can allow you to easily meet unexpected financial challenges such as:
- repairing the brakes on your car;
- paying for a parking ticket; or
- traveling to visit a sick parent.
5 Ways to Save $500 to $1,000 for Emergencies
- Save Automatically. Have part of your paycheck automatically deposited into a savings or share account or set up regular transfers from your checking to your savings account.
- Save a portion of your tax refund or stimulus check. Use tax form 8888 to split your tax refund.
- Cut back on ordering out. Curbside pickup and Uber Eats are tempting, but ordering meals out adds up. If ordering out costs $10-15 and you do it 5 times a week, if you cook at home even once or twice per week and put that money in the bank you could easily afford to create a $500 emergency fund and still have money left over.
- Make your monthly credit card payment on time. The $30-35 you save by not being charged a late fee each month on one card would save you most of the money you need for $500 in emergency savings. Paying your card on time also boosts your credit score, which saves you money by lowering your insurance costs and interest rates on loans and mortgages.
- Cut “Vampire Costs.” By getting rid of auto-renewals, subscriptions, and memberships you don’t use or need, you can cut your expenses and put that money toward your rainy day fund.
Where to Keep Emergency Savings
It’s usually best to keep emergency savings in a savings or share account. These types of accounts allow you to access your money when you need it. Keeping your money in a savings account makes it much less likely that you will use these savings to pay for every day, non-emergency expenses.
Are you ready to set your goal?
Military Saves, a proud participant in the DoD’s Financial Readiness Network, encourages the entire military community to save money, pay down debt, and build personal wealth. The first step is to take the Military Saves pledge, a simple savings plan that works.
Complete the Pledge and Military Saves will send you short email and text reminders, resources, and tips to keep you on track toward your savings goal. Become part of an entire community of savers!
Written by Lila Quintiliani
Published: 23 August 2020