The Five Steps to Prepare for Financial Emergencies (2024)

5 steps to prepare for financial emergencies

Unexpected financial events happen to all of us.

That’s a great reason to put emergency savings toward the top of your financial to-do list.

Here’s how to get started.

Unexpected financial emergencies happen to us all.

It could be the loss of a job, a medical bill, or a car repair you didn't expect. Having an emergency fund isvital to cover these costs and keep your budget on track.

Once you're able to manage your spending and pay all your bills in full and on time, you'll want to beginbuilding your emergency savings.

Ideally, you will want to build an emergency fund that will be able to cover your essential expenses for 3to 6 months. But don't be intimidated by that figure.

It's okay to start small. Even a few dollars saved each payday can make a big difference over time.

Consider starting with the goal of saving one paycheck's worth of money and build from there.

Once you're ready to start building your savings, My Savings Plan® can help you track your savingsprogress.

Once you have a stable source of income, your bills are paid on time, and you’re able to save consistently each month, a separate savings account may be the right place to keep your emergency fund.

A separate account may help you to see your savings accumulate and reduce the temptation to use these vital funds for non-emergencies.

You can open a Wells Fargo savings account with as little as $25 and create a space to easily build and manage your savings.

Remember that consistency is key. Your savings account may come with a monthly service fee if the minimum daily balance falls below a certain predetermined amount or if you’re not regularly transferring money into that account.

Review all your savings account options carefully. We’re here to help you to understand which account may be right for you and how to minimize account fees.

Making regularly scheduled transfers from your checking to your savings account is a great way to build your savings automatically.

You can set up regular automatic transfers to savings that coincide with paydays or other times during themonth when you know you have money in your checking account.

Wells Fargo also offers the Way2Save Savings® account and Save As You Go® transfers where we'llautomatically transfer $1 from your linked Wells Fargo checking account to your Way2Save Savings® account each time you use your debit card for a one-time purchase or complete a Bill Pay transaction through online banking.

And keep in mind that you also have the freedom to transfer money between accounts whenever youchoose.

Sometimes, you may receive a large lump sum such as a tax return. Using these occasional income spikes can be another great way to jump start your savings.

Have a plan in place if you expect a tax refund, annual bonus, or other extra income. It's easy to spend those windfalls, so plan to dedicate a part of that money toward your savings.

Setting a clear goal upfront will make it easier to save that extra money.

When it comes to savings, staying motivated, focused, and consistent is essential.

Stay disciplined, avoid the temptation to splurge, and celebrate your small wins. Every time your savings grows, it is a great reason to pat yourself on the back.

If you need help staying on track, try Budget Watch. This free tool can help you create an online budget and effectively manage your spending, savings, and goals.