You’ve probably heard the term “expect the unexpected” before, but have you put it into practice in your personal financial planning? With all the unforeseen challenges and expenses life can throw our way, building a financial safety net is an essential step in pursuing financial wellness—and that safety net is often referred to as an “emergency fund!”

An emergency fund is a special savings account that you set aside exclusively for paying for sudden, unexpected expenses, ensuring that you’re never fully caught off-guard and unable to pay for whatever you might need in an emergency. But building an emergency fund doesn’t happen overnight; so how can you start small while planning with the bigger picture in mind?

If you're starting from scratch with your emergency fund, begin by saving one month’s worth of living expenses while making the minimum monthly payments on your credit cards. When you have that first month of emergency funds saved, turn your focus to your credit card debt and pay more than the monthly minimum. Once the credit card debt is paid off, go back to building your emergency fund. 

If your credit card debt is very high and can’t be paid in full within a couple of months, then alternate the extra payment every other month: The first month, add to your emergency fund and pay the minimum on your credit cards. The next month, pay more on your credit cards and skip the deposit to your emergency fund, etc.

Here are five ways to boost your emergency fund and change savings habits for life:

  • Treat savings as a bill. Figure out what you can afford to save each month and stash away $75, $50, $25, or even $10 a month. No matter the amount, it adds up and doing it consistently builds the habit. As your financial situation improves, increase the amount. Using the Financial Wellness tool in Online & Mobile Banking can help you document and track your monthly expenses, if you aren’t already!
  • Live one raise behind. When you get a raise, don’t begin spending more. Instead, apply the extra amount to your emergency fund—and once your emergency fund is established, consider putting that extra amount towards retirement! 
  • Automate it. Set up an automatic transfer to your emergency funds account. When the credit union receives your direct-deposited paycheck, you can have a portion of it put directly into your savings or emergency account. Out of sight, out of mind, but you know it's there if you really need it.
  • Track your progress. Even if your contributions are automatic, regularly checking in on your savings is an important step you shouldn’t skip. Tracking your progress and watching your savings grow can be motivational, and it helps build the good security habit of regular account monitoring!
  • Think of it as a life jacket. If you can't find that initial spark to get started, ask yourself how you'd pay your bills if you lost your job tomorrow. Having an emergency fund will help you keep “your head above water”, and provide you the peace of mind of knowing that even when the unexpected happens, you’ll have what you need to tackle the problem head-on.

Remember: Your friends at Sun Federal CU are ready to assist with all your savings needs. Contact us in any way you prefer: call us at 800.786.0945, message us through Message Center in Online & Mobile Banking (or open the accounts you need yourself with Open An Account!), or email sunsupport@sunfcu.org. However you choose, we’re here to help you set up the short-term and long-term savings vehicles that fit your needs.