Building an emergency fund can feel daunting, but these tips can help

By ADRIANA MORGA NEW YORK AP Maybe your car broke down your computer was stolen or you had a surprise visit to urgent care Emergencies are inevitable but you can prepare to deal with them by building an crisis fund Related Articles How to harness the power of positive thinking Ticker A new crash test dummy that better resembles women gets key cabinet endorsement Visa finds even B can t resolve battle with merchants Farmworkers sue Trump administration in California over threat to wages IPO sphere s red-hot year has been cooled by the shutdown and more caution among investors There are so countless things that happen in our lives that we don t expect and preponderance of them require financial means to overcome declared Miklos Ringbauer a certified citizens accountant The industry standard is to save three to six months of expenses in an crisis fund However this can feel daunting if you live paycheck to paycheck or if you have debt But if you re in either of these situations it s even more crucial to build a financial safety net that can help you in times of situation Urgency funds allow you to prevent further debt announced Jaime Eckels certified financial planner and wealth management leader for Plante Moran Financial Advisors Suppose you re paying multiple credit cards and other loans In that situation Rachel Lawrence head of advice and planning for Monarch Money a financial planning and budgeting app recommends that you make the minimum payments while you build your emergency fund Once you ve hit an amount that feels right for your lifestyle you can go back and continue tackling your debt more aggressively Whether you want to start an crisis fund or create better habits while you save here are several expert recommendations Start with small milestones The idea of saving for three to six months worth of expenses can be daunting so it s best to start with a smaller milestone Lawrence recommends starting with a goal of saving then moving on to save one three and six months of expenses The way you approach this goal can vary depending on your income and your budget But starting with small attainable goals can help you build an exigency fund without feeling financially strained Starting small is okay Even if it s right out of your paycheck those small things can add up Eckels noted She recommends building your emergency fund in a separate account from your regular savings account ideally a high-yield savings account which offers a higher interest rate than a traditional savings account Decide on the appropriate amount for your life Knowing how much to save for your exigency fund depends on your life situation Lawrence suggests you gauge your own financial responsibilities to estimate how much your ideal exigency fund should be For single professionals with no essential financial responsibilities such as a mortgage or a car the amount might be to At the same time people with children and several pets might aim to save for six months expenses There s no one-shoe-fits-all resolution Everybody is different especially if you have variable expenses on a monthly basis Ringbauer announced Lawrence recommends that self-employed people maintain two urgency funds one to buffer low-income months and another for true emergencies To build your buffer account Lawrence recommends setting aside certain money during high-earning months You set that amount aside in your buffer account until you have two or three months of the amount that you want she commented Because that way any month where you have less money you go pull from the buffer and it s no big deal Automate your savings Eckels recommends setting up automatic savings as a low-effort way to build your exigency fund Scheduling your savings to be withdrawn from your bank account as soon as your paycheck arrives is an effective way to build a savings habit without having to transfer the money manually I unfailingly tell people if it was never in your bank account you never had it right Eckels added She also recommends that her clients open a separate account one that isn t at the same bank as their checking account so they aren t tempted to transfer the money in a non-emergency Make it visual As you re making progress towards your emergency fund goal making it visual can help you stay motivated according to Lawrence She recommends getting creative with how you track your progress ideally with a method that brings you contentment You want your brain to get rewarded as often as feasible when you re seeing a bunch of progress she disclosed Particular options to make your progress visual include drawing a thermometer-like tracker and keeping it updated as you advance toward your goal documenting your progress on a habit-building tracker on your phone or using a budgeting app with a tracking tool Save windfalls If your budget is really tight and you don t have much wiggle room to set aside money for an urgency fund Lawrence recommends saving windfalls Unexpected chunks of money that maybe you weren t expecting like tax refunds or getting a third paycheck when you normally get paid twice a month or a bonus those are your best solutions to make progress when you re tight otherwise noted Lawrence In general Lawrence recommends that people keep of their windfall for themselves and the rest for their emergency fund With that breakdown you can both save and feel rewarded by the unexpected income If you use it don t feel guilty FILE Biological bills are seen in Temple Hills Md on June AP Photo Jacquelyn Martin File Chances are that an exigency will happen and when it does you don t need to feel guilty for using your crisis fund Lawrence explained Instead it s best to think about how you ve achieved your goal of building a financial safety net for yourself You wouldn t feel bad about using your down payment to buy a house you wouldn t feel bad about saving for retirement truly to retire Lawrence mentioned The Associated Press receives patronage from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy The independent foundation is separate from Charles Schwab and Co Inc The AP is solely responsible for its journalism