Do you have a financial safety net? Instead of waiting for a catastrophe to strike, give yourself peace of mind by saving for the unexpected.
An emergency fund can help you stay ahead of expenses you couldn't see coming, such as a trip to the ER or urgent dental work.
Not sure if you can budget for emergencies? Here's how (and why) you should grow your savings over time.
How an Emergency Fund Can Help
Medical expenses probably aren't in your monthly budget, but that's how an emergency fund can save the day. Start by trying to create a savings plan — especially if you want to:
Stay out of medical debt
Avoid overspending on your credit cards
Make it through periods of unemployment
Ways to Save for the Unexpected
Start small if you need to — a goal of a few hundred dollars is fine. The idea is to build momentum by achieving your first goal and then grow your savings over time. It would help if you planned to save:
Three to six months of living expenses
Your out-of-pocket maximum
A small amount from every paycheck
Consider Your Health Insurance
Whatever stage of life you're in, budgeting for medical expenses should be a top priority. Remember to keep your deductible in mind as well as preventive services that are available at no cost to you.
And if you have an HSA or FSA, consider increasing your contributions to budget for expected health care costs as well as saving for the unexpected.
Have questions? Reach out to learn more about your coverage or to make changes.