Experts @ Home: Emergency Savings
In this segment of The Marc and Mandy Show, Emily Suderman from Access Credit Union shares with Mandy how much to save for emergency savings, and what types of funds to have.
Mandy: Every once in a while you run into some hard times financially and you want to make sure you have an emergency savings fund. I have Emily Suderman from Access Credit Union giving us some tips on how to do that. So, when you’re talking about emergency savings, how much are we looking to have ahead?
Emily Suderman: Great question! So, a good rule of thumb would be three to six months of your monthly expenses set aside, but in the event of a sudden loss of income or a large unexpected expense, we’ve got those funds set aside and earmarked for that emergency. One thing that I’ve seen work really well with the members that I work with is setting up automatic transfers. So, on the day that you get paid, you transfer a certain amount into a separate savings account. And what’s really great is you can set up these automatic transfers online now. So, you can do this all from the comfort of your home.
Mandy: Now, a lot of people have a couple of extra properties, some equity, what’s the difference between that and liquid assets?
Emily Suderman: So, we definitely want our emergency savings to be liquid, meaning it’s not locked in and you have access to it any time. So, something like a tax free savings account can be a great option to store these funds, as long as it’s not locked in. Use a variable account or just an additional savings account is fine too.
Mandy: Thank you so much for these tips, Emily!
To learn more, visit the Access Credit Union website.
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