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Stash it away for emergency preparedness
Sep 26, 2012 | 1787 views | 0 0 comments | 7 7 recommendations | email to a friend | print

By Don Milne,

Financial Literacy Manager, Zions Bank

September is National Emergency Preparedness month. While I am glad I have a supply of wheat in my basement С including one bucket that used to belong to my wife’s grandfather, born in 1902 С I have never had an emergency where I have had to use it (thank goodness). I have discovered that the most important step to take to prepare for an emergency is not a supply of powdered milk or bottled peaches. Instead, the best emergency preparedness tool is cold hard cash in an emergency fund savings account.

Financial experts throw out the suggestion that a family should have three-to-six months of expenses set aside for emergencies. That’s $10,000-$15,000 for most households, and most Americans have nowhere near that in savings. Given all the demands on our pocketbooks, it is a tall order to expect the average family to obtain this cushion.

However, a realistic, very reachable goal is to set up an emergency fund of $500-$1,000. Most people can do this in less than three months, often within a few weeks. Face it, unless you live a charmed life, your car is going to need unplanned repairs, you are going to need to visit the emergency room, or your lawn sprinklers could break and flood your basement.  

Prepare for those emergencies that will happen with unfortunate regularity by saving up an emergency fund. Without an emergency fund, your choices can get expensive. Credit cards charge interest. People who use payday loans often spend $800 or more in fees each year, enough to easily fund an emergency savings account. If you teach all of your adult children to set up an emergency fund, you can answer their phone calls without wondering if they are calling to ask for money.

What are the tried and proven steps to setting up an emergency savings account? First of all, while you may want to keep a small amount of one-dollar bills in your 72-hour kit, your emergency fund should be in a financial institution where it is safe from the neighborhood ice cream truck and the semi-annual Nordstrom sale. Second, use direct deposit for your paycheck. It will keep you from impulse spending if you cash your paycheck at a store, plus it is safer and free. Pay yourself first by setting up a free automatic transfer from your checking account to your savings account each month. You will be surprised how quickly this can grow.

Want more motivation to set up that emergency fund? Zions Bank has teamed up with personal finance guru Dave Ramsey to provide a free online lesson about the importance of saving. You can watch it at

Benjamin Franklin once famously said, “By failing to prepare, you are preparing to fail.” In the case of an emergency, be sure you are prepared to maintain your family’s financial security.

We want your comments online at What actions do you recommend to save up money for an emergency fund? What actions do you recommend to save up money for an emergency fund?

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