Build Your Emergency Fund: How to Start and Why a Money Market Account Makes Sense

Emergency FundRegardless of age, economic status or geography, there’s one thing every household should have: an emergency fund. Even the sunniest days can turn stormy at a moment’s notice. Being prepared with an emergency fund is the best way to avoid debt, stress and even bankruptcy.

Some experts recommend that you save a full six months’ worth of expenses for your emergency fund, but if you’re like most people, that sounds like an awful lofty goal. Instead, the most important thing to do is to just start saving. Even if current savings account rates are low, don’t wait. The sooner you get started saving, the more prepared you’ll be if an emergency strikes.

High-yield savings account options vary, but a money market account may be the best choice for your emergency fund.

Although you may already have a high-yield savings account, it’s a good idea to open a separate account to start your emergency fund. Just as its name says, an emergency fund is for emergencies only – not because the newest smart phone is calling your name or there’s a great sale at the local department store – and keeping that money separate from your everyday accounts is critical.

A money market account is a smart place to keep your emergency fund. The money market will be separate from your regular checking and savings accounts but can be quickly accessed in case of an emergency. You can meet your savings goals faster by automatically scheduling deposits. Having a money market savings account  means the rates you will earn interest at should be a competitive rate. Here are other top reasons to stash your emergency fund in a money market account:

  • Compared to stocks, bonds or CDs, money market accounts can be accessed relatively easily if you need to dip into them.
  • FDIC insurance means your money is protected.
  • Money market rates and balances can be quickly monitored online.

You may be wondering why a credit card, retirement account or home equity loan isn’t enough to cover your emergency fund needs. These don’t tend to be the best choices for a couple of reasons:

  • You’ll pay interest and penalties on a credit card if you’re unable to pay it off.
  • Withdrawing retirement funds early carries stiff penalties.
  • Falling home prices might mean that home equity loan isn’t worth as much as you once thought it was.

By having a true emergency fund in a high-yield savings account like a money market account, you’ll avoid debt and frustration.

Find the right money market account for your emergency fund

Don’t be misled into thinking you’re immune from catastrophes. A job loss, significant medical expense, or need for major home repairs can happen at any time. Even if you’re trying to reduce your spending, setting aside money for an emergency fund is something you simply can’t afford not to do. Start building your emergency savings account today before it’s too late.

Sponsored content was created and provided by Citizens Financial Group.

photo by: 401(K) 2013

Student Loan Debt Sucks But It Can Be Destroyed

student loan debtWhen my wife graduated from college with her four year nursing degree in 2011 she graduated with over $80,000 in student loan debt. It was a heavy burden for both my wife (girlfriend at the time) and myself. We knew it was a ton of debt and that it’d likely take a super long time to pay off.

Back then our minimum payments were right around $700 a month which was a ton of money. In fact, it was even more than our first ever house payment. We knew we wouldn’t want to pay that debt off for over a decade or longer, so instead of wallowing in our sorrows of our massive debt load we made a plan to pay it off as quick as possible.

Made A Budget

The first thing we did was make a budget. Since we weren’t married at the time, we actually made two budgets, one for myself and one for my wife. Our budget was pretty strict but it was in line with our #1 financial goal of destroying her student loan debt.

Any money that we ran into, whether it was a cash gift or our paycheck, that wasn’t in our budgeted spending got put immediately to pay off my wife’s student loans. The surplus in my budget got put into a savings account to pay her loans down once we got married. Sometimes we’d make as many as four payments to her highest interest rate student loan in one month!

Unfortunately, with just the income from our jobs it would still take many years to pay off the massive amount of student loan debt so we looked at ways to speed up the process. We found a couple ways to make more income that ended up helping us out a ton.

Finding Extra Income

We wanted the debt gone and the quickest way to pay more money toward that debt was to find extra income. Once Tori finally got a job we had her base income to put toward the student loan debt. I already had a job, but I was a salaried employee so I couldn’t work extra hours to earn more money.

Tori, however, was an hourly worked which meant she could pick up extra shifts at work to earn some more money. On top of that, if she worked over 80 hours in a pay period she earned overtime at 1.5 time her base pay which was pretty sweet. Tori picked up extra shifts when she could and we put all of the extra money toward extra student loan payments.

I wanted to help in the debt pay off journey, so I brainstormed some ways to earn some extra money. I got a new job that resulted in a higher salary and less hours which was pretty sweet. Working less allowed me to start doing something I had always wanted to do, start a blog.

I never thought it’d end up making money from my blog, but with a lot of hard work and a bit of luck we started making money! It was exciting because it meant I had found a way to contribute toward paying down the student loan debt.

Both sticking to our budget and finding extra income helped us to pay off Tori’s debt very quickly. In fact, we managed to finish paying off her student loans this year in less than 3 years total!

Did you graduate with ton of student loan debt, or did you graduate debt free like I did? Either way, I’d love to hear your stories about your money adventures. Shoot me an email (adventuringdollars at gmail dot com) or leave a comment below!

Photo courtesy of jscreationzs via

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