So you've been told countless times that you need to have an emergency fund, but you're still not entirely sure what that means or how to actually start one. Don't worry, you're definitely not alone.
In this blog post, we're going to be taking an in-depth dive into what the infamous "emergency fund" is and how to start yours today. Building an emergency fund is pretty straightforward if you make it a priority. Within a couple of months, you can have a good rainy day fund in place and the peace of mind that comes with it.
Is an Emergency Fund Different Than a Savings Account?
So is an emergency fund different than a savings account? Well -- an emergency fund is simply just money set aside specifically for unexpected expenses, such as medical bills, job loss, car repairs, and more. A savings account is for more usual purposes, like a down payment on a house or college tuition.
While savings accounts could be used for emergencies, emergency funds provide an extra financial cushion in case of crises. It gives you peace of mind that you can cover surprise bills without going into debt.
How Much Should i Save in my Emergency Fund?
So how much should you save in your emergency savings fund? Well, a good rule of thumb is to save enough to cover 2 to 6 months of essential living expenses like rent, utilities, groceries, and transportation in case you lose your job or income source.
For a majority of people, somewhere between $10,000 to $15,000 would be ideal. The more stable your work, the closer to 2 months you can save. If you're self-employed or work in a volatile industry, aim for 6 months of savings.
Start Building Your Emergency Fund
To build your emergency fund, start by setting a goal for how much you want to save. A good rule of thumb is to aim for $500 to $1,000 to start.
Start Building a Budget
Review your normal monthly cash flow and expenses to see where you can trim costs. Look for expenses you can reduce or eliminate, like dining out or entertainment. Create a realistic budget that allows you to put money aside each month for your rainy day fund.
Look for Ways to Increase Your Income
If possible, request a raise at your job or look for ways to earn additional income on the side. Any extra money you bring in can go straight to your emergency fund. Selling unwanted items online or doing odd jobs for friends and neighbors are easy ways to generate more cash.
Check on your progress each month and make adjustments as needed. If you find your expenses creeping up, look for new ways to cut costs. And if you receive any windfalls like a tax refund, put that money into your emergency fund. Building the fund may take time, but sticking with it will give you peace of mind for those unexpected life events.
Growing Your Emergency Fund Over Time
Once you have your starter rainy day fund established, work on building it up over time with regular contributions and investing for growth.
Have your bank website automatically transfer money from your paycheck or bank account to your emergency fund each month. Even small, regular contributions grow significantly over time by compounding. Increase the amount by a percentage each year as your income rises.
Check for ways to trim your budget by a couple dollars here and there and put that money into your emergency fund. Things like dining out less times each week, replacing cable with streaming, meal planning, or lowering utility bills frees up extra money to put towards your emergency savings.
Invest For Long-Term Growth
Don't let your money sit in a basic savings account earning no interest. Move it in a high-yield savings account, a money market account, or a short-term CD where it can generate higher returns. These options keep your money accessible while growing your balance.
Once you have a couple months of expenses in your rainy day fund, invest a portion of it in the stock market with index funds or ETFs to potentially increase long-term returns. While there is risk, the stock market has historically returned an average of 6-7% annually after inflation. Let your money work for you and continue making regular contributions to build wealth for the future.
Save Money by Joining EASY Wireless' FREE Phone Plan!
Ready to start saving money? If just an emergency fund isn't enough, joining EASY Wireless’ free phone & data plan is a another no-brainer if you're looking to trim costs. Our plans offer unlimited talk and text nationwide for FREE. Why pay more when you can receive premium service at no cost? The savings could grow to thousands a year!
Make the switch and start enjoying the perks of connectivity programs like Lifeline & ACP. Here's some info about those programs:
Lifeline & ACP Programs
Lifeline and the Affordable Connectivity Program (ACP) are government programs designed to make phone and internet services more affordable for eligible low-income individuals and families.
Here at EASY Wireless, we understand the importance of affordable connectivity for everyone, and we want to help you access the benefits of these programs so you can always stay connected to your loved ones, like friends & family, even when on a budget. Here's what you receive with us:
What Benefits do I Receive With EASY Wireless??
Upon qualifying for the programs above, here’re the connectivity benefits you receive:
EASY Wireless Unlimited Plan
- FREE Unlimited Data
- FREE Unlimited Talk
- FREE Unlimited Text
- FREE SIM Card Kit and Activation
- Choose to Keep Your Number or Get a New One
How do I Apply For My FREE PHONE With EASY Wireless?
To get started with EASY Wireless, apply online by clicking the below:
Start Saving Today!
Or you can come to one of the EASY Wireless's retail stores, where our customer service agent will help you apply for the benefits.
Either way, the first step is to provide proof of identity with a government-issued ID. This is so you can confirm your participation in one of the qualifying programs or that you meet the income requirement.
We accept the following U.S. Government Issued ID:
- U.S. Driver License
- Certificate of U.S. Citizenship
- Certificate of Naturalization
- U.S. Passport
- U.S. Government, State or Tribal issued-ID
- U.S. Military ID cards
- Permanent Resident Cards
- Permanent Resident Alien Cards
You can show the following documents to prove that you are taking part in a government assistance program or use them as proof of active benefits:
- Statement of benefits from a food distribution program.
- Federal Public Housing Assistance Vouchers Documents
- Indian Affairs general assistance documents
- Notice letter of participation, such as an award letter
- Participation documents from a program, such as a screenshot from an online account.
- In order to show income, you can provide any of the following proofs:
- Unemployment Documentation
- Copy of your State or Federal income tax return.
- Three months' worth of current pay stubs.
- Veterans Administration or Supplemental Security Income benefits letter.
- A divorce decree or child support document that states income.
- Retirement or pension statement.
Need Multiple Lines of Service or an Additional Phone?
EASY Wireless is a full-service cellular store that cares about all of your communication needs. We have everything from basic prepaid phone plans to unlimited mobile hotspot data plans for every budget and usage requirement. Also, we offer a selection of brand-name phones that combine quality, reliability, and the latest technology.
That's not all – we also provide an array of amazing accessories to enhance your mobile experience. At EASY Wireless, we're dedicated to providing exceptional service and ensuring you find the perfect plan, compatible phone, and accessories to suit your lifestyle and preferences.
Visit us for all your cell phone and wireless service needs today!