Whether it’s a broken fridge, new school shoes for the kids, or your car breaking down, we can’t plan for everything. One thing we can all do to help our future selves is start an emergency savings fund.
Think of an emergency savings fund like a financial safety net that can help cushion any unexpected falls. Having savings to fall back on also means you're less likely to apply for credit, or seek emergency funds from less than ideal sources, both of which could affect your credit rating in the long-term.
Knowing you have money to fall back on if you really need it can also help reduce stress and anxiety caused by money worries and improve your overall health and wellbeing. Win, win!
Getting started
There’s no one-size-fits-all approach to building an emergency fund. First, you need to work out how much you can afford to save - it doesn't matter whether it's £10 a month or a £100 a month - your future self will thank you.
The best way to do this is to work out how much money you have left each month after essential outgoings, and then decide how much of that to put into your fund. Having a target in mind can help - you can plau around with our savings calculator tool to see how long it would take to save a certain amount.
Remember: you don't need to be able to put away large sums of money to successfully build an emergency fund. You could try the 1p challenge (where you save 1p on the first day, 2p on the second day, and so on), or employ the help of tools like automated 'round ups', standing orders which leave your account on the day you get paid, or automated budgeting apps.
Where to keep your emergency savings
Ideally, you want to strike a balance between earning interest and having quick access to your money (very important in an emergency!), which might require shopping around.
Talk to us
If you'd like to discuss your needs and see whether we have a suitable account for you, book a savings review with one of our qualified savings advisers here.
