Saving for emergencies can seem impossible, but if you look for strategic ways to tuck away a bit here and there, you’ll thank yourself later.

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Financial emergencies can happen to the best of us. After all, sooner or later, even the most careful planners will experience some kind of unexpected event – events that often carry a hefty price tag. Whether that’s a job loss, car accident, illness or home repairs, preparing and building an emergency savings fund can help prevent events like these from causing a much bigger financial problem.

Nearly one-quarter of Americans have no emergency savings whatsoever, according to a 2018 Bankrate survey. In addition, nearly half (47 percent) of Americans cannot come up with $400 to cover an emergency, as originally reported by the Federal Reserve Board. That puts many Americans just one unexpected life event away from accruing debt or serious financial juggling. To help plan for unforeseen expenses, BECU’s Financial Educator, Stacey Black, suggests setting up a savings account that you only touch in the event of an emergency. “Having a separate savings account, or even multiple savings accounts, just for emergencies can help you avoid future debt by being able to cover an unexpected expense without having to use a credit card or personal loan,” she says.

Set realistic goals

Black knows that saving for emergencies can seem impossible; after all, it’s much more fun to save for a vacation or a big purchase, or money may be especially tight for many. But if you look for strategic ways to save, you’ll thank yourself later and your wallet will, too.

When creating short and long-term savings goals, Black recommends saving enough money to cover three to six months of expenses. “This will help provide a financial cushion if an emergency keeps you from receiving an income for an extended period of time,” says Black.

According to the same 2018 Bankrate survey, just 22 percent of participants said they only had enough savings to cover expenses for six months, while one-quarter of millennials and Gen Xers said they had no savings at all.

However, Black notes that you can consider building toward this goal by setting smaller financial milestone goals along the way. “For many, this [goal of three to six months of expenses] can be overwhelming and may discourage people from saving altogether if they can’t save the recommended amount,” says Black. “So it’s important to set monetary goals that you can actually achieve within a shorter amount of time, understanding that it’s okay to start small and build from there. The most important thing is to begin saving.”

Stacey Black, BECU

Save strategically

According to Black, there are a few things you can to do to get over that first hurdle and help kick-start your savings no matter where you’re starting from. For example, consider opening a high-yield account like a money market account, which has no monthly fees or minimum balance requirements, or a CD (certificate of deposit), which has specific fixed terms and interest rates. “And, through BECU’s Money Manager, there’s even an option to name your savings account as ‘emergency funds’ or ‘the unexpected’. For someone like me who has multiple savings accounts, I’ve found this to be a helpful resource to give me something tangible to work toward.”

And if your monthly budget just feels too tight for another expense, then consider starting your emergency savings account at a point where you come into a little extra money, like a raise, tax return or incentive payout. “Plus, for those that may not even have an emergency fund, or would like to open another savings account for things like medical or home expenses, the extra funds can be a great way to jumpstart it,” says Black.

Maintain your financial health

Finally, consider an emergency savings account as part of your overall financial health. “For instance, make sure you keep track of your monthly expenses and budgets, and also make sure your savings goals are part of your ongoing planning and tracking,” says Black.

Check in every few months to see how much you have saved and adjust if you need to add more or change your setup for any reason. “This is important if you go through an expensive life event, like marriage or moving, or have an emergency that causes you to dip into your existing funds,” says Black.

As a member-owned credit union, BECU is focused on helping increase the financial health of its members and communities through better rates, fewer fees, community partnerships and financial education.