52 Weeks To A Painless Emergency Fund
According to a 2013 survey by Bankrate.com, 50% of those surveyed had less than a three month cushion in case of emergencies and 27% of respondents had absolutely no savings at all. If the Great Recession taught us nothing else, we know that we need to have money saved in case of a job loss or a financial challenge.
While a three month emergency fund can delay financial disaster, most experts recommend saving enough money to cover six months worth of expenses. But building an initial emergency fund can be difficult or daunting if you have absolutely no savings at all. The 52 week savings challenge can help you build an emergency fund quickly and painlessly.
First, find a bank that will pay you to set up an account. Plenty of banks want your business and they
are willing to pay you to do so. Most require that you either set up a direct deposit into the account or require that you deposit a certain amount within a particular time.
Begin the first week by depositing $1 into the account. Finding that first dollar is easy enough. Shake out the bottom of your bag and deposit the money. If your account is online only, simply link the two accounts and transfer $1 into the new account at the end of the week.
Each subsequent week you will deposit $1 more than the previous week into the account. So, on week 2 you deposit $2. On week 3 you would deposit $3 and so on and so forth. One full year of this process will get you through 52 full weeks.
At the 52 week mark you will deposit $52. This should bring your account total to $1,378. If you’ve also earned money from the bank by opening the account, your total should be close to $1,400.
This is a simple and easy way to begin saving money for emergencies. Eventually, your emergency fund should have a total of six months of living expenses.
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