Newsletter 2021 V1 - Importance of Savings in the New Year
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As you may already know, most financial experts recommend that you have an emergency fund set aside to cover anywhere from three to six months’ worth of expenses in case you should need to draw on it during a time of difficulty. With the New Year underway, now is the perfect time to evaluate where you stand with your emergency savings funds.
If you are just getting started saving, or you’re a little short and looking to continue building your safety net, there are several things you can do to boost your emergency savings fund:
Treat savings as a bill.
The most basic thing you can do is to figure out what you can afford to save each month and pay that amount to your emergency fund. Start small. Even adding $10 a month can start to accumulate as the months pass. This practice is important, as saving each month is habit-forming, and you’ll want this routine to stick for your long-term financial well-being. As your financial situation improves, feel free to increase the amount.
Automate it.
If you haven’t already, 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 automatically transferred to your Base Savings account (more on that below). In this case, “out of sight, out of mind” comes with a sense of ease and the confidence that those funds will be there when you really need them.
Give your savings an instant upgrade.
If you find yourself with an increase in funds, perhaps due to a tax refund or work bonus, apply the extra amount directly to your emergency fund instead of spending it.
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As a financial institution that is focused on making a positive difference in our members’ financial lives, we recognize that assisting in building our members’ emergency funds is one of the most direct ways we can help you stay on track for a bright financial future. That’s why our primary savings account—the account that every member has that holds your $5 membership share of the Credit Union—was recently renamed Base Savings. The new name better reflects our intended purpose of the account: to build your base for achieving your personal financial goals. However, the new name isn’t the most exciting change to the account. Your Base Savings earns you an enhanced dividend rate on up to the first $500 in the account, encouraging faster growth of your savings to better cover emergency situations.
As we move further into 2021, make sure you take a moment to check on where you stand with building up your emergency fund. No matter where you are, rest assured we are here to assist you every step of the way with tools, coaching, and anything else we can do to help you on your financial journey.