lifestyle
EMERGENCY FUNDS words courtesy Arvest Bank image rawf8/Shutterstock
Life throws us a curveball ever y now and then – and it ’s often costly – whether it ’s a broken air conditioner, an unexpected medical expense or losing your job. That ’s why it ’s crucial to create an emergency fund. Do South® reached out to Arvest Bank for tips on where to begin and how much we need. DS: HOW DO WE KNOW HOW MUCH MONEY WE NEED
DS: OUR FINANCES CAN CHANGE FOR THE BETTER
IN AN EMERGENCY FUND?
AND FOR THE WORSE, SO HOW SHOULD THAT AFFECT
Arvest: You never know what that emergency will be, how big
OUR EMERGENCY FUND?
it will be or how long it will last, so it’s recommended that you
Arvest: Before you start saving, you need to budget so you
save enough money to cover at least seven months of expenses.
know how much money you can realistically put back without
This can take time to build, so it’s important to begin saving
neglecting your monthly and annual bills. When you have a
as early as possible, even if your initial contributions are small.
financial setback, try to continue building your emergency fund, but cut back elsewhere. For example, try to avoid eating
Set goals along the way. Determine what percentage of your
out, and consider cancelling memberships or subscriptions.
check you can put back, then have it automatically withdrawn When you have extra money, add it to your emergency fund.
and placed into your emergency fund.
This may be in the form of a pay raise, a tax refund, the DS: SO, IT’S LIKE A SAVINGS ACCOUNT, BUT FOR
additional money you have after paying off a credit card.
EMERGENCIES ONLY! IS IT ALSO A GOOD IDEA TO
That extra money you can deposit may be short-lived, but it’s
DIVERSIFY?
worth investing while you have it.
Arvest: That’s a personal preference. Some like to keep everything in a savings account, while some prefer to earn
DS: WHAT ARE SOME OTHER AREAS WHERE WE
money on their emergency fund. In that case, you might keep
COULD FIND SAVINGS TO INCREASE THE AMOUNT WE
a third of your cash in a savings account and place some in a
DEPOSIT INTO OUR EMERGENCY FUNDS?
money market account that allows withdrawals at a specific
Arvest: Evaluate where you spend excessively such as eating
minimum level, or purchase short-term CDs with three- or
out, entertainment, big purchases, etc. You can also:
six-month terms so you earn interest. It’s important to remember
• Request a rate reduction on your credit card
that your emergency fund needs to be accessible when your
• Shop for better car insurance or homeowner insurance
emergency happens. If you elect to go with a savings account,
• Assess luxuries such as cable TV or your mobile phone plan
don’t get a debit card or checks associated with the account.
to see if you’re subscribing to more than you need
This will help you resist borrowing from the account.
• Shop with a grocery list so you don’t “impulse buy”
Consumers who are looking for more resources can visit with a local Arvest branch manager or via Arvest.com for more information.
DOSOUTHMAGAZINE.COM
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