Atlantic Blog

Growing up, I went to Boy Scouts with my dad (who always bragged about being an Eagle Scout), and one of the things you learn early on, besides how to set up a tent, is the motto "Be Prepared."

It's a nice idea; you prepare for eventualities so that when they arrive, they don't disrupt your life and leave you panicking. Contextually, it usually revolved around dealing with a bear wandering into your campsite or what to do to prevent hyperthermia.

Still, the general concept of the motto applies to other aspects of your life. You can't see the future or what curveballs might be right around the corner, but you can prepare for potentialities. I wish I'd understood the importance of the motto sooner.

Don’t Panic Just Yet

Shortly after getting my new puppy, Lance, he got sick. He was sluggish, unresponsive, and wouldn't eat. Snow battered outside, but I was worried about the boy, so my car skated to the animal hospital in the middle of the night. After a series of tests, the vets discovered that he had Lyme disease from before he was rescued, which had gone untreated.

The bill that the vet slid across the table was for $600. I would have paid anything to take care of him, but panic percolated in the back of my mind as I looked at the price.

Unexpected emergencies are already stressful enough without the added weight of the looming bill. Ever since, I've tried to set aside a little money each month as part of an Emergency Fund so that the next time things go wrong, I'm not left panicking over the bill.

So, what is an Emergency Fund Anyway?

An Emergency Fund is any amount of money set aside for unexpected expenses. Ideally, you want to have enough money set aside to cover a month of your expenses should something happen where you cannot work or if you need to cover emergencies. It seems like a hefty sum, but managing to collect a large emergency fund provides you with even more support should something go wrong.

I try to put aside at least $100 from every paycheck into my savings, but I know how hard it can be to put money aside, especially as the price of merely living continues to rise. If you can manage to set aside even ten dollars a month into your savings, you’ll find that it adds up quickly. Any small action you take now to help yourself in the future will be appreciated when you need it.

But…where should I store it?

That’s a great question guy who wrote the header. If you’re squirreling away a substantial amount of money, chances are you don’t want it sitting around the house. Now, I did have a friend who hid all his money under his mattress, but if you do that, you’re one curious break-in away from needing to replace the locks on your front door and needing a new Emergency Fund.

The safest and best option is to park your cash in a bank account, but what’s right for you?

• Savings Account – Safe, reliable, and classic for a reason. You can deposit your money into your savings and leave it there until an emergency arises. Most financial institutions will have some form of interest accrual so that you can earn money from your savings.
• Free KASASA Saver Account – Why not earn rewards on your savings? With a Kasasa Saver Account at Atlantic, you can earn 4.00% APY* on balances up to $250,000 so that your Emergency Funds can accrue extra money. If you store your emergency funds in a Kasasa Saver Account, you’ll be even more prepared for whatever the future brings.
• Money Market Account – If you have a large sum set aside, it might make sense to pursue higher-yield options. A money market account is a unique investment tool that allows you to earn substantially higher dividends than traditional savings accounts, which often require a minimum deposit. At Atlantic, a Money Market Account requires a minimum deposit of $1000 to open an account. Savings are tiered, and higher balances will earn higher return rates.
• Alternatively, it can also be helpful to have an emergency Credit Card. Having a card you can use when there isn’t enough money in your emergency fund allows you to pay things off over time and can be a real boon when those unexpected life events inevitably pop up.
• If you find that you need a larger sum to cover unexpected life events, you can also consider a Personal Loan. A personal loan can help alleviate the stress of the situation and allow you to pay back the borrowed sum for likely less interest than a credit card would require.

So, learn from my mistakes, and be prepared! You’ll be happy you were.

We’re Here to Help!

Life loves to throw curveballs, and no matter how fast your reaction time is, chances are you can't dodge them. Surprise expenses are inevitable, conveniently occurring at the worst times, and an Emergency Fund is your first line of defense. You can even automate the process through automatic transfers or deductions. Set aside what you can, in the future you’ll be glad you did.

If you’re interested in learning more about savings options or choosing the right account for your Emergency Fund, we’re ready to help. Please stop by any of our convenient branch locations or call 800-834-0432 to speak with a team member today.

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Each individual’s financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.