Did you hear about the Government Shutdown?  Some 800,000 government workers didn’t get paid for a little over a month.  Have you stopped to consider how you would pay your bills if you didn’t get paid for a month?  What about 3 months?  Do you have an emergency fund?  (You probably should).

The first part of this video series offers a few tips on how you can start or improve your emergency fund.

Bonus Tips

Emergency Fund Bonus Tip 1 – Consider reducing your 401(k) contributions temporarily

To bolster your short-term savings, you may want to consider reducing your contributions to your 401(k) temporarily.  This can free up cash flow to add to your emergency fund.  Once  you reach a comfortable level, resume the deferrals.  One note of caution:  Pay attention to the company match, it’s free money.  Don’t reduce your contributions to a level where  you won’t maximize the employer matching funds.

Emergency Fund Bonus Tip 2 – Use Your Tax Refund.

Do you normally get a large tax refund?  Consider using part or all of it to boost your short term cash reserves.  Whether you expect it or not, it can be an easy way to help you get to that goal.

Emergency Fund Bonus Tip 3 – Take Advantage of Direct Deposit

Is your paycheck deposited directly into your bank?  Consider splitting the deposit to two accounts, one your normal check account, and the other your cash reserve fund.  Sometimes it is easier to save it, if it never reaches your spending account.


Online Savings Accounts

Some of the online banks make it easy for you to save and reward you for doing so.  Most of them have no minimum balances, and all three of them pay you interest.  They have an easy to use online interface.  And you can transfer money back and forth to your local checking account.  We have experience using both Capital One and Synchrony Bank (and neither of them pay us anything to talk about them.)  Three of the more popular ones are linked below.

Capital One

Synchrony Bank

Ally Bank

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