Personal Expert Advice
Explore our business resource center
How do I Set up an Emergency fund?
An emergency fund is a savings account that you can use to cover unexpected expenses, such as a car repair, medical bill, or job loss. Here are some steps you can follow to set up an emergency fund:
- Determine your goal: Decide how much money you want to have in your emergency fund. A good rule of thumb is to aim for three to six months’ worth of living expenses.
- Open a separate savings account: Choose a high-yield savings account that is separate from your everyday checking account. This will help you avoid the temptation to spend the money on non-emergency expenses.
- Set up automatic transfers: Consider setting up automatic transfers from your checking account to your emergency fund account on a regular basis. This can help you build your fund consistently and without much effort.
- Keep it liquid: Make sure you can access the money in your emergency fund quickly and easily in case you need it. Avoid investing the money in long-term, high-risk investments.
- Review and update: Review your emergency fund periodically to ensure that it is still adequate to cover your needs. If you experience a significant change in your financial situation, such as a raise or a new expense, consider adjusting the amount you save in your emergency fund.
Prominent Financial Consultants offers a range of services to help our clients succeed, and we would love the opportunity to discuss how we can help you. If you would like to schedule an appointment with us, please schedule a free 15 Minute Financial Clarity Call so that we can learn more about your needs and goals.