You did it. You set up automatic transfers and diligently built up your rainy-day fund, and then the coronavirus hit. While you’re likely stressed and a little anxious about what the post-COVID-19 future may hold, at least you had an emergency savings account to tap into. But now that you’ve spent it, how do you build it back up? And what do you do if you have an unexpected expense before you have enough built up to pay for it?
How to Rebuild Your Emergency Savings
Even in a good economy, more than half of Americans don’t have enough money saved to cover an unexpected expense—such as a car repair or emergency room visit. Verve’s got some great, simple options for getting started, like our Name Your Savings account option (Hint: “Emergency Fund” makes a great name). Build a starter emergency fund of $1,000 in a year (that’s just $20 a week!) with these tips.
- Leave no expense behind. It’s time to list out all your expenses—honestly and transparently —to see where your money is really going. Whether you do it old school with pen and paper, enter them into a Microsoft® Excel file or you tap into a budgeting app, it’s time to make a list of your expenses and take the steps (like checking your budget before tapping “buy now” when you see a great new deal online) to stick to your budget.
- Double-check your expenses. Outlining all your expenses can be a bit overwhelming, and it can also be easy to overlook expenses. That’s why it’s smart to review your expenses at the end of each month to see if there are recurring expenses you missed in your budget, as well as to track spending habits over time. Don’t forget to factor in annual expenses for each season (back-to-school, holiday shopping, etc.) as well as non-monthly expenses that can be worked into a monthly budget (like haircuts for the family that might occur every six to eight weeks). Your regular expenses can even help you save if you use an option like Verve’s Round Up, which rounds up every debit card purchase to the nearest dollar and deposits that change into savings for you.
- Take a break from some of the extras. We’re not saying you can’t still enjoy yourself but take a look at things like cable and streaming services, subscription boxes, meals out and convenience snacks and beverages, and see where you can make some changes. Instead of three streaming services and cable, cut the cord and pick your top streaming service, and set up automatic transfers to rebuild your emergency savings fund. Still have a landline? Might be time to drop it. Vacations and extra outings might have to be set aside for a short time. You can always add visits to your go-to coffee shop or a trip to your favorite restaurant back into your budget as your income grows. There’s time for rewards once you’ve reached your savings goal.
- Say goodbye to the clutter. You know the saying, “one person’s garbage is another’s treasure,” so take a look around your home for things you thought you HAD to have but haven’t touched in months. Sell them safely online and deposit the cash into your emergency savings
- Make a plan and stick to it. From meals to vacations, planning ahead is the key to cutting costs and sticking to your budget. Whether you plan your meals for the week or the month, buying what you need when you need it makes it easier to stick to your budget (less temptation to order takeout), and it reduces the amount of wasted food.
How Verve can help
Rest assured, all your planning and hard work building your emergency savings was well worth it before, and in due time, you’ll have your emergency fund rebuilt again. But what happens if you have an unexpected expense or you find yourself in a position where you can’t pay all your bills?
Reach out and let us know. We’re all in this together.
We know our community is facing new challenges right now due to COVID-19, and that’s why we’ve developed loan options and payment programs to help reduce the strain on your budget. Check out all of the options here, or call us at 800.448.9228 (Wisconsin) or 312.491.7000 (Chicago) and one of our team members can review your financial situation and make recommendations to help you stay on track with your expenses.
It’s Verve’s goal—in line with our guiding seven Cooperative Principles—to address community needs to develop a strong, sustainable future. Verve is committed to keeping our community financially fit by providing a variety of ways to help our members make it through the coronavirus pandemic. Help your friends and family rebuild their emergency fund by sharing this blog post.