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A fact of the matter is that life can take unexpected turns. Unfortunately, when a curve ball does get thrown, the first thing that strikes out is a person’s finances.

Not knowing what the future holds can be a little anxiety-inducing, but you do have ways to control some of that uncertainty. In other words, you can plan for what’s ahead, even if it’s impossible to account for everything.

One way to account for the unexpected is by keeping an emergency fund. Having extra money stashed away for that ever-approaching “rainy day” can make a difference. Here’s what you can do now to add some savings to your emergency fund.

Why It’s Always Important To Have Emergency Savings

The purpose of an emergency fund is to ensure you aren’t blindsided when confronted with an unexpected expense. By having a cash reserve handy, you minimize the impact of such costs on your daily life.

“Emergencies” are in the eyes of the beholder. They can take many forms, including:

• Car repairs or replacement
• Personal injury or sickness
• Family injury or sickness
• Pet medical issue
• Layoff or unemployment
• Home repair or appliance replacement
  

To get a feel for the scale of such costs, Yahoo! Finance has a good write-up describing common emergency expenses. According to the article, some emergency bills can total up to several thousand dollars!

Bills totaling up to four and five figures can be intimidating. At the same time, it’s crucial to keep things in perspective. Ideally, proverbial fires shouldn’t be flaring up every day of your life.

Therefore, you should take things at a measured pace and gradually build your emergency savings over a sustained period. Here are a few tips to help you get started.

First, Set a Goal and the Groundwork for Success

One of the first things you can do when building (or strengthening) your emergency fund is to set a goal and work towards that. Emergencies are different and defined on a person-to-person basis.

Many financial professionals recommend that someone have three to six months’ worth of living expenses saved as the basis for an emergency fund. Only you can define what an ideal savings goal is. As you evaluate likely scenarios affecting your regular spending, be aware of the average costs and adjust accordingly.

After you have a general idea of your savings goal, it’s time to set yourself up for success. One of the most seamless ways to do this is automating your savings.

You may have an easier time reaching your goal by automatically transferring to a dedicated account at the start of every month. Any amount helps, whether that be ten dollars or several hundred. The most important thing here is consistency.

Notice that we advised transferring your money to a dedicated account. Having a separate account specifically for emergencies can serve as a deterrent against spending this money frivolously.

Transferring this money to a money market or high-yield savings account is a good idea since these accounts are designed to pay higher dividends than a traditional savings account. They are also flexible enough to let you withdraw from them without incurring significant penalties.

Next, Budget for Emergencies

An effective way to account for emergencies is budgeting for them. Try making contributions to your emergency fund as a regular expense. When contributing to your emergency fund is routine, it doesn’t feel disruptive.

We have some pointers on how to build and stick to a budget. If you’re just starting, you can take things slowly. Try pitching a few dollars every paycheck to your emergency fund and adjust your contributions as you get more comfortable.

Don’t let your fears or anxieties drive your contributions, as that may make you overcompensate in a few areas. Cover your necessities first, then account for possible emergencies—but don’t overdo it. For example, if you have to cut your grocery bill for an emergency contribution, you may be depriving yourself in ultimately harmful ways.

Finally, Take Advantage of Windfalls

“Windfalls” are extra spots of income that aren’t part of your regular revenue streams. They can take many forms, including:

• An income tax refund
• Bonuses from work
• Monetary gifts from friends or family
• Money made from garage sales or spring cleaning
  

Windfalls are a great way to shore up your savings. Take every opportunity to reach your emergency savings goal to build a safety cushion ahead of schedule. You don’t have to commit every dollar from a windfall to emergencies, but a little extra never hurts. Make a contribution that best fits your lifestyle.

Of course, if you aren’t fortunate enough to receive a windfall, you can always create opportunities. For instance, you can try a no-spend challenge and use the savings you’ve made to pad out an emergency fund.

Remember: the best way to overcome an emergency is having a plan. When funds are stashed away for life’s twists and turns, you have the confidence to take on any challenges.

First Florida is here to help you stay financially capable at all stages of your life. Explore our website and brush up on our tips for staying on top of your finances and preparing for the future.