No one likes to think about it, but you must. What would you do if you lost your job tomorrow? Could you pay the bills while you searched for new work? Would you have to start using credit cards or maybe borrowing from friends and/or family to pay for necessities? One thing is certain: the future is uncertain.

Therefore, one of the best things you can do for yourself and/or your family is build an emergency fund. Too often, people rely on credit cards for emergencies. The problem with that approach is that those credit bills often don’t get paid back right away, leaving you with even more debt: interest and/or late fees on top of your bills!

Remember, unexpected and unpleasant challenges happen to all of us from time to time, including:

- A family member’s death
- Expensive car repairs
- A natural disaster (e.g., flood, fire)
- Necessary home repairs (e.g., roof, plumbing, electrical)

How to start your emergency fund:
Decide where you want to start putting your saved money. A good idea is a high-interest, easily accessible savings account. For instance, you may want to build your emergency fund in an ING Direct Investment Savings Account (ISA). This account has no fees and yields 1.5% interest every year (check current rates to verify). Let’s imagine you build your emergency fund up to $15,000 (say, equal to six months worth of living expenses). (Yes, you can do this with self-discipline and regular contributions—even small ones!) Over the course of one year, you would earn $225 in interest: $225 of free money! After the first year, you would have at least $15,225. If you don’t touch the account and the interest rate stays the same, you’ll earn an additional $228.38 in interest the next year!

How much money should I tuck away?
This depends on your personal situation. Some major factors to consider are: whether or not you’re single, if you have kids, pets, roommates to share costs, how much you’re obligated to pay each month toward debts, and more. All of these circumstances factor into how much you should be saving. It’s best to have an emergency fund with at least six months of living expenses saved. If your family lives on one income, 6–12 months is even more advisable. Figure out how much your monthly expenses are (eliminating anything not absolutely necessary). Add a small buffer amount as well, to be safe. So, if your monthly necessary expenses are $3,460, increase that to $3,500. When an emergency occurs, you’ll be happy to have the extra $40 every month for unexpected expenses.

Five Ways To Easily Build Your Emergency Fund:
1.Start small and commit! Begin with a goal of $1,000 for emergencies. If you can’t save much each month, that’s okay. It’s just important that you’re saving something. Only $50 a month will get you $600 at the end of the year, not including the interest you’ll earn. Once your financial situation improves, commit to save even more each month. When you hit your first $1,000 savings target, you can decide if that amount makes you feel comfortable or if you want to save more.
2.Treat it like bill paying (yuck): You’ve probably heard the saying, “pay yourself first.” Brilliant advice. Do it! When you treat your emergency fund savings as a monthly bill, “paying into” it is no longer and optional, and you’ll tuck the money away instead of spending it.
3.Automate it: Set your online checking account so that a particular amount of money is deducted from it every month (or week, or whatever) and it goes directly into your emergency savings fund. When you do this, you won’t have to worry about transferring money; the bank does the work for you!
4.Stash your tax refund or bonus from work: If you earn bonuses at work, don’t blow it all on things you want. Put all or most of the money into your emergency fund. The same thing also applies to tax refunds.
5.Sell Stuff: Almost everyone has something they can do without. Most people have SEVERAL of these things! If it’s collecting dust and you know you don’t and honestly won’t use it, just let it go. Sell it and put the money into your emergency fund. You’ll help your bank account and eliminate clutter in your home: a win-win!