{"id":13668,"date":"2019-01-20T03:00:53","date_gmt":"2019-01-20T08:00:53","guid":{"rendered":"https:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/do-you-have-an-emergency-savings-fund\/"},"modified":"2019-01-20T03:00:53","modified_gmt":"2019-01-20T08:00:53","slug":"do-you-have-an-emergency-savings-fund","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/01\/20\/do-you-have-an-emergency-savings-fund\/","title":{"rendered":"Failing to Plan is Planning to Fail: Do You Have an Emergency Savings Fund?"},"content":{"rendered":"
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\"Do<\/p>\n

If 2019 is the year you promised to stop\u00a0your bad spending habits in their tracks and ensure your savings go untouched, then maybe the old proverb \u201cfailing to plan is planning to fail<\/em>\u201d hits home for you. But what about the things that don\u2019t make it into the plan? You know, those expenses that just pop up and need to be taken care of immediately?<\/p>\n

It\u2019s not uncommon to walk up to your car and find a parking ticket perched upon your windshield, or for your hot water tank to break down suddenly in the middle of winter, or to find yourself frantically looking for flights to visit a sick family member.<\/p>\n

But since you don\u2019t usually account for parking tickets in your monthly budget, what\u2019s the plan? These things happen all the time, so it\u2019s also time to expect the unexpected \u2013 big or small \u2013 and make an emergency savings fund.<\/p>\n

What is an emergency savings fund?<\/h2>\n

An emergency savings fund protects your regular savings account from those unexpected costs like a parking ticket, an overnight visit to the vet, death\/illness in the family, or even prolonged unemployment. This account is used strictly for emergencies and should be accessible in a moment\u2019s notice.<\/p>\n

How much is enough for an emergency fund?<\/h2>\n

The suggested amount you should store in an emergency fund is the cost of living for three months in case of unemployment, including rent, utilities, transportation, outstanding bills\/fees, groceries, etc. The easiest way to determine your cost of living is to\u00a0gather all your monthly credit card bills and bank statements over the past year and get a monthly spending average.<\/p>\n

Exploring your options<\/h2>\n

Seeing the suggested amount as a whole may seem a little daunting, but you don\u2019t need to come up with your emergency fund all at once.<\/p>\n

As with your regular savings account, you can allot a certain amount of each paycheque to your emergency savings fund until you reach your goal, wherever you decide to store it.<\/p>\n

Some people love seeing all their money in one place. Others feel more comfortable setting up boundaries between what\u2019s theirs to touch and what is strictly for emergencies. So whether or not you decide to keep your regular savings and emergency savings in the same spot, here are some reliable and easily accessible places to get your emergency fund started.<\/p>\n

A high-interest savings account<\/h3>\n

When it comes to any kind of savings, using some form of an investment account is always a good option. With an investment account, you can benefit from interest earned, giving you money you otherwise would not have. It\u2019s essentially free money, even if the rate of return isn\u2019t much.<\/p>\n

However, as mentioned before, you want to make sure your emergency savings are easily accessible.<\/p>\n

Thankfully, there are short-term investment accounts that allow you to withdraw your money anytime with little-to-no penalty or strings attached.<\/p>\n

An excellent way to see\u00a0your money grow is by looking into a high interest savings account<\/u>.<\/p>\n

High-interest savings accounts\u00a0are usually only available from online banks. And since they typically have lower carrying costs in comparison to the Big Five banks, they can offer you a much higher interest rate. Some people are hesitant to use an online bank, but if you become a member of the Canadian Deposit Insurance Corporation (CDIC), you can fully insure your money up to $100,000.<\/p>\n

And with interest rates as high as 2.35 per cent, you can get quite the bang for your buck by applying for a high-interest savings account at RateSupermarket.ca today.<\/p>\n

A piggy bank<\/h3>\n

Those who work for cash commission and tips may find themselves with a lot of cash on hand (Friday-night servers know this all too well). And instead of frivolously spending it, regularly putting aside a portion or even all of it can make a big difference in a short amount of time.<\/p>\n

Now, a piggy-bank won\u2019t earn you any interest, but sometimes visually seeing your money\u00a0pile up and being able to physically touch it can be a motivator to continue saving.<\/p>\n

But don\u2019t get comfortable leaving your money here; If you are going to use this method to build your emergency fund, I\u2019d recommend using it in conjunction with a savings account. Make it a practice to visit your piggy-bank every two or three months, and empty it into an account of some sort to secure your funds.<\/p>\n

A Tax-Free Savings Account<\/h3>\n

A TFSA<\/u> is a also great place to stash your emergency fund because it\u2019s accessible at any moment, and you\u2019re not taxed on the amount you withdraw. You\u2019re also not obligated to replace the amount you withdraw, giving you the freedom to use your money whenever you so please.<\/p>\n

And while it\u2019s called a savings account, it\u2019s actually an investment tool where you can store different types of investments in addition to your cash, like mutual funds, GICs, stocks and bonds.<\/p>\n

Though you can get the most out of your money by leaving it in there long-term, TFSAs are also good for short-term investments. And you can find the best TFSA rates Canadian banks have to offer<\/u> at RateSupermarket.ca.<\/p>\n

The post Failing to Plan is Planning to Fail: Do You Have an Emergency Savings Fund? appeared first on MoneyWise.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

If 2019 is the year you promised to stop\u00a0your bad spending habits in their tracks and ensure your savings go untouched, then maybe the old proverb \u201cfailing to plan is planning to fail\u201d hits...<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/13668"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=13668"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/13668\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=13668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=13668"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=13668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}