Building an emergency savings account

Do you have an emergency savings account? Not having a savings to tap into when confronted with emergencies can seriously jeopardize your financial health. Use the following tips to build a savings account.

• Choose wisely. Open a savings account that has no or a low minimum balance requirement. Compare savings rates to find the best account for your needs.
• Put your savings on autopilot. Set up automatic contributions from your paycheck or a checking account. Start with a small amount like $25 and you probably won’t even miss that money.
• Rebuild after an emergency. If you have to tap your savings for an emergency, start replacing the funds as soon as possible once your financial situation improves.
• Deposit extra cash. Use bonuses from your job, financial gifts, and other windfalls to add to your savings. If you choose to splurge on a special item, try not to use the full amount of cash available so you can deposit some of it in your savings account.
• Consolidate. Sell items around the house that you no longer need or use. Deposit the profits into your savings.
• Be realistic. Skip playing the lottery or spending money on other get-rich-quick schemes. The cash you spend in this area can go toward boosting your emergency savings.

Accumulating a savings doesn’t have to be painful. If you make a few simple changes in your behavior you can have a healthy emergency savings account in no time.

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