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Expect the Unexpected: How to Prepare an Emergency Fund

Expect the Unexpected: How to Prepare an Emergency Fund

Job loss. Car accident. Storm damage. Medical expenses. You can’t plan for everything, but when it comes to financial emergencies, it’s important to expect the unexpected. Financial advisers recommend a three-month cushion, at the very least, for these types of significant, unplanned expenses. If you don’t already have an emergency fund incorporated into your budget, we’ve put together a few suggestions to get you started.


You can’t build an emergency fund for monthly expenses if you don’t know what those expenses are. Set aside time to thoroughly detail both your fixed and variable expenses:

  • Housing expenses including mortgage or rent, utilities, insurance, and property or renters tax.
  • Auto expenses including car payments, insurance costs, fuel, vehicle registration renewal, oil changes, and other regular or unexpected maintenance or repairs. You may also need to consider parking fees or your driver’s license renewal.
  • Other vehicle expenses, such as boats, ATVs, UTVs, RVs, campers, and more.
  • Child care expenses including tuition and enrollment fees, daycare costs, or other babysitting expenses.
  • Medical, healthcare, and prescription expenses.
  • Education expenses including student loan payments, school supplies, textbooks, extracurricular activities, and fees.
  • Credit card, loan, and tax payments.
  • Personal living and entertainment expenses.

Make note of what expenses could change in the future. For example, indicate the month that your apartment lease is up for renewal and your rent might increase, or when you’ll submit the last payment to your child’s orthodontist, for example.


Once you’ve documented your monthly expenses, the idea of setting aside enough money to cover one month – let alone three or more – may feel daunting. Start small. Develop a plan to contribute to the fund on a regular basis, whether weekly or monthly, and increase the amount as your situation allows. You may find that you are able to cut certain expenses that seem extravagant or are no longer necessary.


The easiest way to start your emergency fund is with a dedicated savings account from The Bank of Elk River. Your payroll department may have an option to split your paycheck’s direct deposit, so you can choose the amount you’d like to go into this account each pay period. Not only will you be setting aside funds on a regular basis, you’ll earn interest, and that can add up more quickly than you expect.

Contact the experienced personal bankers at The Bank of Elk River today. We can answer any questions you might have and help you set up an emergency fund savings account to get you started. You may find that the time is right to consolidate your credit card debt or refinance your mortgage as well.

No matter what life throws your way, The Bank of Elk River is here for you.

Emergency Fund Budgeting


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