Saving Strategy: Saving for the Unexpected
(3 Minutes Read) – This article is part of our America Saves Week celebration.
How often have you heard that saving for life’s unexpected events is a necessary part of being financially prepared? Most likely A LOT! Experts agree that a good savings strategy is to have three to six months of expenses in your emergency savings account.
If you’re not there yet, don’t let that shake your confidence! Feeling unsure about what to do next can make it even harder to get or stay motivated to save for those unexpected events or opportunities that arise.
Strategies to Boost Your Savings
Instead of focusing on what you haven’t accomplished, here are a few saving strategies to consider to build your financial confidence and start your path to saving for the unexpected.
- Set a goal of saving for the unexcepted. Start with $500 for emergencies and once you reach this amount, set a new goal for another $500 and keep going. Reaching several smaller goals feels good and when we feel good, we’re more likely to remain committed to our plan.
- If you’re not sure exactly how much you can realistically save each month, try using the America Saves Spending and Saving Tool to get a clear view of your finances. Once you know exactly what your income and expenses are, you will be able to set a realistic timeframe for saving that first $500 or beyond.
- Consistency can help build confidence. Saving automatically every time you get paid is the easiest way to be a consistent saver and consistency builds confidence. You can set up split deposit saving with your employer or your financial institution so that a portion of every paycheck goes directly into a dedicated savings account. When you are saving $10, $20 or some other amount every paycheck you will see regular progress, building your confidence along the way.
- Instead of only focusing on the negative reasons for having an emergency savings account and saving for the unexpected, think of it as saving for opportunities. Framing the reason you are saving in a more positive light may help you feel better about setting money aside. Not only are you saving to pay for car repairs, home expenses, or medical bills; you may also be saving for an unplanned dinner out to celebrate a friend’s birthday or the chance to go see your favorite artist in concert. Those positive feelings can be motivating.
- Use the three to six months of expenses in a savings account as a guideline. Try not to become discouraged if you haven’t reached this goal. Instead, focus on what makes the most sense for you at this time, knowing that as your income grows and/or expenses decrease, your ability to save more will change.
More Savings Strategies
America Saves is here to help you get started on any of these strategies. Check out the 6 Steps to Establishing a Spending and Savings plan, take the America Saves Pledge, or listen to our Think Like A Saver podcast. We’re with you every step of the way on your savings journey.
What is America Saves Week?
Since 2007 America Saves Week has been an annual celebration as well as a call to action for everyday Americans to commit to saving successfully. Through the support of thousands of participating organizations, together we encourage individuals to do a financial check-in that allows them to get a clear view of their finances, set savings goals, and create a plan to achieve them.