RICHMOND, Va. (WWBT) - For years financial experts have stressed the importance of an emergency fund, and now is the time you may actually need it.
Three to six months of expenses, that’s been the golden rule of how much money to have stored in a savings account, just in case.
“This is the rainy day that we’ve all been preparing for. I mean, a lot of us, we’re in crisis mode right now. It’s extremely stressful for so many people. So, if you have that emergency savings fund now is the time to use it,” Kim Palmer, a finance expert with NerdWallet, said.
She says if you need to dip into that fund right now, it’s OK. This is why you have it. To help pay your rent or mortgage, to buy essentials like food.
“And really this experience it underscores how important those emergency savings are,” Palmer adds.
If you still have a job or income coming in and you haven’t had to use it, keep boosting the fund.
If three to six months of expenses are just too much, aim for smaller goals like $500 or $1,000 in a savings account. If you don’t need to spend your stimulus check right away, put it in savings.
Another idea from the folks at Nerdwallet is to put your savings into a high yield online savings account so you make even more in interest. You can often find the highest yields with online banks. Just make sure your money is FDIC insured and easy to access without paying fees.
If you don’t have an emergency fund right now, or a way to build it up, don’t focus on it.
“People are really turning to all kinds of things. Even things like credit cards, family and friends. I mean this is really crisis mode where you are just trying to survive this period until it gets a little bit easier,” Palmer said.
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