Only 37 percent of Americans have enough cash in savings to cover an unexpected expense. (Think: Broken appliances, tire blowouts, high vet bill, etc.) The rest have to slash their budget or look to credit cards or family and friends.
An emergency fund can help prevent this urgent "crunch," and help keep you from dipping into your savings. Start building your fund with these simple tips:
- Separate it from everyday spending. If your emergency dollars are in your checking account, you may accidentally spend them. Consider opening a savings account to make the money less accessible.
- Automate the process. Set up an automatic monthly transfer between your checking and savings account, or ask payroll to direct-deposit a portion of your paycheck into a savings account.
- Donate a set dollar amount each week. Every weekend, give your emergency fund $10—or whichever amount you choose. Just be consistent so you can see it grow over time.
Using Your Emergency Fund
Reserve your emergency fund for unexpected, absolutely necessary and urgent expenses—medical bills, car repairs or a new furnace in the middle of winter.
State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites hyperlinked from this page. State Farm has no discretion to alter, update, or control the content on the hyperlinked, third party site. Access to third party sites is at the user's own risk, is being provided for informational purposes only and is not a solicitation to buy or sell any of the products which may be referenced on such third party sites.