The Wave | August

Rainy Day Fund: Save for Emergencies According to a survey released by Bankrate, more than 75% of Americans don’t have enough money saved to pay six-months of their bills in case of financial emergency and more than a quarter have no money saved at all. These numbers, while scary, aren’t entirely shocking – since the recession, it’s been harder for the average worker to put money away in case of economic stress. However, saving money away for a time when you really need it is one of the smartest things you can do to protect your future. While there’s a lot of disagreement about how much and where it should be kept, almost all financial sources recommend having some form of easily-accessible savings in case of a tight situation. How much should I have? There are a lot of different beliefs when it comes to how much people should store in their emergency fund, ranging from a full year’s worth of monthly expenses to a few thousand dollars for things like replacing AC units. However, one thing that’s always mentioned is saving an amount you feel comfortable with, while taking into consideration how much standing debt you have. Since emergency funds should be kept in fairly liquid accounts for easy access, they often don’t gain too much interest. For this reason, many suggest keeping a fairly small emergency fund until high-interest debt accounts, like a credit card, are paid in full. That way, you’re not losing money as your interest payments go down the drain. (You can read more about this in our other blog post, “To Save or Pay off Debt, That Is the Question”) What really counts as an emergency? An emergency is something you couldn’t plan on and your emergency fund should only pay for bills that reflect that. Surprise medical bills, primary transportation issues, home repairs, bereavement-related expenses and job loss all count as emergencies. Surprise opportunities like going on a trip or a limited-time sale are things that could be passed up, and shouldn’t be reasons to tap into your emergency fund. This also means irregular expenses, like homeowner’s insurance or yearly taxes, shouldn’t be paid through your fund; while you may have forgotten about them, they do come every year, and can always be accounted for through regular savings. Many people struggle with building emergency funds because there’s no one else to for accountability. If you struggle to add to your savings each month, consider making automatic payments, like you were paying a bill. While it may seem silly at first, your future self will thank you for maintaining the obligation! This article is from the FCU Blog – read more at . You can also get more financial education advice on our website at It pays to talk about FCU! continued from page 1 What’s interesting, though, is how little we talk about our financial services providers. Likely because the realm of money is something harder to talk about in polite company, many people never talk about their bank or credit union, good or bad scenarios alike. At FCU, we’re hoping to change that. As a matter of fact, we want you to know just how much we appreciate word-of-mouth support – and we’re willing to pay you for it! When you refer a friend to bank with us, we’ll reward you both with a $50 Gift Card. Just register online at our referral site, , where you can email, post or tweet a personal invite to your friends to bank with us. When a friend registers and opens a qualified checking account, we’ll send both you and your friend a $50 Gift Card! There is NO LIMIT to the number of friends you can refer! If you’re a satisfied member, we want you to spread the word! If you talk about your dinner, and your brand new phone, why not talk about your credit union?