Planning for emergencies, such as a hurricane is like buying insurance: you pay into an account and hope you’ll never have to use it. But life happens. Having money in the bank to cover those unexpected expenses. It can also help reduce stress and keep you from relying on credit cards and loans to keep your life afloat.
Since the 2022 hurricane season is upon us, here are four easy and effective ways to establish and maintain a hurricane emergency fund.
1. Start Small
Many financial planners advise setting aside enough money to cover at least six months of expenses. That’s a worthy goal. But for many, it’s also a daunting task, an objective that will take years – not months – to achieve. So, set a realistic and achievable amount for your emergency fund, and then get in the habit of contributing regularly. Then don’t touch the account except for real emergencies. Leave it alone and it will grow.
2. Pump It Up
When you get a surplus of revenue, tax refund, or windfall, consider using a portion of that money to bolster your emergency account. Fight the temptation to increase spending with every new dollar that comes along.
3. Make It Automatic
With online banking, it’s easy to set up routine transfers from your primary account to a separate savings account. Consider allocating a portion of each month’s income to a hurricane emergency fund. Consider establishing the account at a financial institution other than your regular bank. As the saying goes, “Out of sight, out of mind.” If the money never shows up in your regular checking account, you’ll be less likely to use it for everyday expenses.
4. Slash Expenses
Take a hard look at your budget and consider everything fair game: expensive dinners, extravagant parties or trips, and so on. You may find that a surprising number of dollars can be freed up and stashed away in savings. The key, of course, is to direct those savings – immediately, if possible – away from regular spending and into your hurricane emergency fund.
Build a Safety Net With a Hurricane Emergency Fund
We hope that you and your family are recovering physically, mentally and financially after last year’s hurricane season. These tips are useful in case of a natural disaster, unexpected injury, or just an unfortunate expense such as a car breaking down that you did not expect. Having a hurricane emergency fund tucked away is important in these situations and many others.
If you have any questions, then contact us online or call us at (813) 915-1110. A member of our team will be happy to speak with you.