Since emergency funds are usually put into a savings account, many people wonder if there are any differences between saving up money for an emergency fund versus saving money in a savings account. For some people, there are no differences, but there can be if you want to put funds into both. You might be wanting to save money for emergencies while also saving money for long-term financial goals. Understanding the differences can help you accomplish these goals. If you ever have any financial concerns or questions about bankruptcy, be sure to reach out to a Tennessee bankruptcy lawyer for assistance.
Building an Emergency Fund in Tennessee
There are several methods you can use to effectively build up an emergency fund in Tennessee for potential disasters in your future. Emergency funds tend to involve savings of up to $10,000 or more. This money can be placed into your savings account or kept at home, depending on your personal preferences.
You might be thinking $10,000 is a lot of money for an emergency fund that is never spent except for the off-chance of an actual emergency. If you find yourself struggling to save up this much money, you have the option of saving up for a rainy day fund instead. Rainy day funds cover less serious emergencies like damaged vehicles or one-time emergency room visits and usually involve $2,500 total in savings.
When it comes to saving up for either of these types of funds, there are several tips that can help:
- Place a portion of or all of your pay raises and bonuses in your emergency fund
- Apply a portion of your tax refund into your savings account
- Set up an automatic deposit through your bank to your emergency fund every week or once a month of $50 or more, depending on your income
Savings Account Tips in Tennessee
Methods for building up your savings account in Mississippi depend on your spending habits, what financial sacrifices you are willing to make, and your level of income. One way to avoid the temptation to use money from your savings is to set up your savings account with a different bank than where you have your checking account set up.
In terms of how much money is helpful to have in savings, most financial experts advise people to save up three months’ worth of income. However, this depends on what your long-term financial goals are. You may be putting money into savings for a car or house. The process of putting money into your savings is made easier by setting up automatic transfers each week or month and by creating a financial plan you agree with.
Bankruptcy Lawyers in Chattanooga, Tennessee
Saving up money can be one of the most challenging habits to get into. Reach out to our team of lawyers in Chattanooga, Tennessee and North Georgia if you are in a tricky financial situation. Contact Tom Bible Law to talk to a Bankruptcy attorney in Tennessee at (423) 424-3116 for a free consultation today. Our bankruptcy attorneys are located in Chattanooga, Kingsport, and Tullahoma.