Emergency Fund: Why You Should Have One
Emergency or rainy-day fund. Nest egg. Whatever you call it, everyone should set some money aside, whether they're just starting out or well into their journey.
When to Start Saving?
Now. Because your financial security can take a hit at any time and come from anywhere, the question is no longer 'Should you save for an emergency fund?' but 'How quickly and how much?'
How Much is Enough?
You may not be able to avoid the event that requires an emergency fund, but you can and should prepare for it.
While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, one rule of thumb is to put away at least three to six months' worth of expenses. Add up essential living expenses for one month multiply by the number of months to be prepared for, and that's a possible rainy-day fund to plan for. That total may take you by surprise but should be a goal to shoot for. If you need assistance, talk to your Huntington banker.
Expenses to keep in mind when calculating your emergency fund:
- Rent or mortgage
- Utility payments (gas, electric, water, garbage)
- Telecom payments (phone, cable, and internet)
- Insurance payments (car, health, and home)
- Transportation costs (car payment, gas, public transit)
- Debt payments (credit cards and all loans except mortgage)
- Grocery expenses
- Other monthly expenses
You can also use our Emergency Fund Calculator to help determine how much of your income should be set aside for emergencies.
Where to Keep an Emergency Fund
After you figured out how much to line your rainy-day fund with, you'll have to decide where to keep it. It's advisable to keep some cash, as much as $200, at home for immediate access.
For the rest, liquidity is still important, but it’d be wise to deposit whatever remains of your emergency fund into a safe, but quickly accessible account. Consider a savings account connected to your checking account, a money market account that comes with a debit card or check-writing privileges that can earn interest, and use digital tools to stay on track.
Open a Huntington Savings Account
Savings accounts are great for setting aside cash for big purchases, like buying a house, or for emergency rainy day funds. You can set up scheduled transfers from your Huntington checking account to your savings account which can help you reach your savings goals even faster.
Learn More
The information provided in this document is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering financial, legal, technical or other professional advice or services, or endorsing any third-party product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circumstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circumstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.
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