Being prepared in the face of unexpected emergencies may seem like an unattainable luxury, but in practice, anyone can do it if they take the first step: Just start!

We recommend that all of our members work on building up their emergency fund as soon as they have the chance. Having an emergency fund will help ensure your ability to pay bills or cover unexpected expenses in the event of an emergency.

What is an Emergency Fund?

An emergency fund is money set aside to cover unexpected life events. Think of it as a financial safety net that can help prevent additional debt and stress. Your emergency fund is important to help you cover healthcare expenses or prevent financial hardship(s) due to home and/or auto repairs, theft, or job loss. Your emergency fund should be separate from your checking or savings account to prevent you from dipping into it for normal expenses. Avoid accounts that tack on a penalty for withdrawing the money before the account matures, like a Certificate of Deposit (CD). Instead, make sure you can easily access your funds in a liquid account like a normal savings or a Money Market account.


image of dog Using your Emergency Fund

How do you know when to draw the line? Like any account, it is always tempting to use the funds when an event adds pressure to your life. Maybe you feel tense about paying for karate lessons this week- but feeling tension over known expenses is normal. Think more on the lines of an unforeseen layoff or incurring a major medical expense. Here are a few examples of what may count as an emergency:


  • Medical emergencies where health insurance may not cover you or a loved one fully
  • Loss of a job or income that may prevent you from covering your bills
  • Travel expenses if a loved one passes away or falls ill
  • Unexpected and necessary repairs to your home or car

image of spilled moneySaving for your Fund

Most experts advise having enough money saved to cover at least six months of expenses with a little bit of cushion. When determining the amount of money you should keep in your emergency fund, calculate how much you need to live comfortably each month. Start with your take-home pay and subtract all your monthly expenses from it. Include what you pay for housing, utilities, bills, food, and other necessary expenses. Then determine your goal: how many months of savings you want to have. Once you know your goal, you can look at your finances to see how much you can contribute to your emergency fund each month and determine how long it will take to fund the account. To begin saving, contribute either a percentage of your leftover budget or a set amount from every paycheck. Direct deposit is a great tool, because you never see the money, removing the temptation to spend it!


Image of Fast foodSaving Faster

Bulking up your emergency fund can be a slow process, but there are ways to expedite your saving so you can meet your goal faster. Here are a few tips:


  • We know how tempting extra spending money can be, but saving the money you receive from bonuses, gifts, or tax refunds is a smart way to grow your fund faster with minimal impact.
  • Boost your income by starting a side hustle that utilizes your skills and passions, or try selling items you no longer use.
  • Whenever you feel like making an impulsive purchase, put the money aside. If you still want to buy the item after 30 days, do it. If not, put the money into your emergency fund.
  • Reduce the amount you spend on takeout, monthly subscriptions, or shopping habits by cutting them out or utilizing coupons and resale stores.

Contact Cascade Community Credit Union for a quote on refinancing your home, car or other debts. Many times, we can save you additional money each month that can be placed directly into your emergency fund.


Cutting back on your expenses and boosting your income work hand-in-hand to get you to your goal faster.



Image of girl with ipadAfter You’ve Saved

Once you reach the goal you set and feel comfortable with the amount you have in your emergency fund, start addressing some of your other financial goals by opening a new savings or investment account. Do you dream of owning a house or buying a new car? What about that home renovation you’ve always wanted? Have you planned for retirement? If you have questions about how to achieve your financial goals, ask the experts! Cascade Community can help you accomplish your goals by providing you with helpful financial tips, offering low interest rates and flexible terms that benefit you.

Finally, be proud of your accomplishments! Once you’re prepared for an emergency, you’re in control and can plan the future you want for yourself.