Fox Money Blueprint: How to Save Money and Build an Emergency Fund

In this next installment of the Fox Money Blueprint, we’ll build upon the solid foundation you built in the previous blog posts, by identifying expenses, setting goals, establishing a budget, and getting a support person. You’re now ready to rock and roll! That said, where do you first start directing your hard-earned money?

Pay Yourself First

We know the importance of saving money, but we hardly ever take the necessary actions to actually do it. When you first get your paycheck, we highly recommend that you pay yourself first before putting money towards other expenses. That means setting aside the most amount of money you can towards savings. Use your spending/savings plan to help you determine how much to set aside each month. Setting aside some money each month can help you quickly build an emergency fund.

Building an Emergency Fund:

Having even $500-1000 saved can be a game changer on a rainy day. When it comes to building an emergency fund, a good rule of thumb is to have enough to cover your highest deductible. Those types of deductibles could be medical insurance, auto or homeowner’s insurance related. Let’s say that your homeowner’s insurance deductible is $1000. The goal would be to save that amount.

One thing to note about an emergency fund is it is meant to be built, used, and rebuilt. As we all know, life happens! It’s not so much about what emergency came up that the money needed to be used, it’s really about the fact that you had emergency funds available.

Save for the Future

In addition to putting money into savings, it’s often a good idea to plan to put aside some money towards the future. Even just a small amount of money can make a huge difference over time, thanks to the power of compounding and the rule of 72’s.

The earlier you start the better, but it’s never too late to start contributing towards your future! In fact, there are many ways you can maximize your financial contributions to your 401K and retirement accounts.

If you have an employer savings plan like a 401k, check to see if your employer matches a certain percentage of the amount of income you contribute. If so, try to contribute up to the match amount. It’s free money! For example, if your employer matches up to 5% of the amount you contribute, save 5%. If you can’t do that right away, start with a percentage that works for you. The next time you get a raise, increase your contribution by 1%.

In the next installment of the Fox Money Blueprint, we’ll talk about how to start paying off debt. In the meantime, if you have any questions about your financial planning or budgeting, our team is here to help! Call the Fox Communities Credit Union financial wellness team at 920-993-9000.

Fox Ripple Effect Financial Makeover Challenge

As you learn new skills with the Fox Money Blueprint, you can also follow two teams of Fox members and all that they are learning as part of the Fox Ripple Effect Makeover Challenge.

Fox Communities Credit Union launched this new event on April 2 and challenged two teams to reduce debut, build savings and improve their credit scores for chances to win cash prizes.

Each team works one-on-one with a Goodwill Financial and Debt Solutions Services personal finance coach to learn new skills and work towards their financial goals in this 6-month challenge. The team with the largest improvement in each of those 3 financial areas will receive a top prize of $5,000.

Catch all the updates from the participants on Fox’s social media channels and blog!