Life is full of surprises, but an emergency fund can help you prepare for whatever comes your way.
If faced with an unexpected expense of $400, one third of Americans say they would need to use a credit card, borrow from a friend, sell something, use money from a bank loan, line of credit, payday loan, advance, or overdraft … or would just not be able to pay it at all.*
If an unplanned car repair, out-of-pocket medical bill, or other expense would present a hardship for you and your loved ones, consider taking steps now to build an emergency fund.
Financial advisers recommend setting aside three to six months' salary in an emergency fund, and only using those funds to pay for things like health expenses, critical home and auto repairs, or essential expenses after a job loss. And, when you do use emergency funds, it's important to replenish the money as soon as possible.
If setting aside three to six months' salary seems overwhelming, start small with these tips to prepare for that inevitable rainy day:
The Personal Financial Planning Series from Board University is designed to provide foundational financial planning knowledge on cash management and budgeting, debt management and reduction, and saving and investing for retirement. To learn more, log on to Benefits Connect and click the Board University logo in the upper right corner of your homepage. Select Content Library in the upper left corner, then scroll down to the Personal Financial Planning Series. All members of the Presbyterian Church (U.S.A.) and its affiliates may participate in any one or all four courses in the series, which are available in English, Spanish, and Korean.
The Retirement Savings Plan of the Presbyterian Church (U.S.A.) (RSP) can also help with all your financial goals, from budgeting and debt management, to building emergency savings and more. Use the resources and tools Fidelity Investments offers through NetBenefits to learn more, actively plan for your future, and model different scenarios. From the NetBenefits homepage (login required), select Menu on the left side of the toolbar and choose Learn, Planning, or Tools from the options.
If you have medical coverage** through the Board of Pensions, you can earn 25 Call to Health points for completing the Emergency Savings challenge (September 27 – November 7).
* Source: Report on the Economic Well-Being of U.S. Households in 2020 (Federal Reserve)
** Call to Health is not available to members enrolled in Triple-S, GeoBlue, or the Medicare Supplement Plan.