Emergency Funds

How and why you should build your emergency savings

When it comes to savings, “expect the unexpected” is more than just a clever turn of phrase; it’s a guiding principle for the importance of setting aside dollars to have on hand just in case. Read on for some of our top resources on how to build an emergency fund, why it matters, and how much you should have. 

Am I financially prepared for an emergency?

When you think “savings account,” what comes to mind first? Maybe it’s a down payment for a new home, or maybe you’re planning a big vacation. But before you can start saving for big future purchases, you need to make sure you’re prepared for the unexpected with an emergency savings account. Get the details here.

Long-term vs. short-term emergency funds

Here’s an interesting fact for you: According to the American Psychological Association, 72% of Americans name money as their #1 stressor at home. If you find yourself among that 72%, we have a few suggestions to help you financially prepare for the unexpected and hopefully ease your anxiety.

It’s good to consider emergency savings for the short term as well as long term. Let’s take a look at each.

How much should I save each month?

No matter how large or small your savings goal is, it’s a good idea to factor contributions to your savings account into your monthly budget. Use this calculator to compute the monthly deposit amount needed to reach a savings goal.

Best accounts for emergency funds

Keeping an emergency savings fund just makes good financial sense. Not only does it help keep you from relying on credit when an emergency arises, but it’s also just good for your stress levels! Knowing you have money set aside — even $500 is a great start, with the end goal of 3-6 months of expenses — can make a world of difference. But here’s a question that often gets overlooked: Where is the best place to keep your emergency funds? We’ve compiled some helpful information to get you started.

Small steps to a bigger emergency fund

Building an emergency fund might seem like a big undertaking, but really, even small steps can add up quickly. Here are a few of our favorites:

  • Work with your payroll department to set up a separate direct deposit (or set up an automatic transfer from within your account) and divert a portion of each paycheck directly to your emergency savings — that way, the savings happen automatically and you won’t even miss those dollars.
  • If you have checking and savings accounts with UBT, you can enroll in our RoundUp program, which automatically rounds up your debit card purchases to the nearest dollar and deposits the difference into your savings account each day.
  • Consider adding bonuses, tax refunds, or other unexpected income to your emergency savings (provided you don’t have other more pressing needs to address, like revolving debt or repairs you’ve been putting off).

Whether you use these methods or take a different approach, don’t forget to revisit your emergency fund needs from time to time — perhaps if you’ve dipped into those dollars or your financial situation has changed. And as always, if you have questions, we’re here to help.

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Emergency fund calculator

Our emergency fund calculator spreadsheet will help you determine how much you should set aside for the unexpected.

Boost your emergency fund with an added bonus

If you’re looking for the perfect opportunity to open a savings account with UBT, the time is now: We’ll give you a $100 bonus* when you open a new savings account and meet requirements. Plus, you can open an account online in about five minutes — less time than it takes to change a tire. Learn more and get started here.

*To qualify for the Savings promotion, you cannot be a primary accountholder on an existing Simply Savings or Simply Savings Student account. Offer not valid if existing savings account closed 120 days prior to 05/01/2023. Receive $100 when you open a Simply Savings account and complete the following within 90 days of account opening: (1) maintain a $2,500 balance; and (2) enroll in paperless statements via online or mobile banking. Bonus is credited to your active account within 100 days of account opening if you meet requirements. Simply Savings requires a $2,500 opening deposit in new money. Simply Savings earns .50% APY as of 06/15/2023. Fees may reduce earnings; rates subject to change. Promotion offers limited to one new checking and one new savings account per person and cannot be combined with other offers. Available 05/01/2023 to 09/29/2023. Member FDIC.

Learning Center articles, guides, blogs, podcasts, and videos are for informational purposes only and are not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.