1. Start small and build momentum: If the idea of saving several months’ worth of expenses feels overwhelming, remember that starting small is key. Reaching this milestone can help you feel more in control and motivated to save more. Once you’ve hit your initial target, you can work toward larger goals. Consider calculating three to six months’ worth of essential living expenses and using that as a long-term benchmark. Breaking it into smaller, actionable steps keeps the process manageable.

2. Automate your savings: Saving consistently is easier when it’s automatic. Set up a recurring transfer from your checking account to a dedicated savings account to ensure you’re contributing regularly. This “set it and forget it” strategy eliminates the temptation to spend the money elsewhere. You can also use direct deposit to split your paycheck, sending a portion directly to your savings account. This way, saving becomes a seamless part of your financial routine.

3. Protect your savings from inflation: The cost of everyday essentials like food and rent continues to take a toll on your wallet. As a result, you may need to adjust your emergency fund target. For example, if your grocery expenses have increased by 15%, your savings goal may need to grow proportionately. To make your money work harder, consider using a high-yield savings account that offers competitive rates. Affinity’s SmartStart Savings account ¹ helps you grow your funds faster while keeping your money secure and accessible for emergencies.

4. Be prepared to replenish: Your emergency fund is there to support you when unexpected expenses arise, so it’s okay to use it when needed. However, make it a priority to rebuild your savings as soon as possible after dipping into it. Treat it like a recurring expense in your budget, setting aside a portion of your income to replenish your fund until it’s back to your desired level.

5. Remain flexible and revisit your plan: Life circumstances and financial goals can change over time, so it’s important to revisit your savings strategy periodically. Has your rent or mortgage increased? Do you have new expenses, like childcare or healthcare costs? Adjust your plan to ensure your emergency fund reflects your current needs. Staying flexible also means recognizing that saving during tough economic times isn’t always linear. If you need to reduce your contributions temporarily, that’s okay. The key is to stay consistent over the long term.

Building an emergency fund doesn’t happen overnight, but with small, consistent steps, you can create a safety net that protects your financial wellbeing. Start your journey today by setting up a savings account and automating your contributions.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.

¹Retrieved from: https://www.affinityfcu.com/personal-banking/banking/savings/smartstart-savings