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(continued from How to Plan for Emergencies)...

When it comes to unforeseen emergencies, the best defense mechanism and readiness tool is a household fund established specifically for emergencies and unplanned events. Establishing an emergency fund is one of the first things you should do when striving for financial stability.

If an emergency fund does one thing, it gives you peace of mind. Unexpected financial burdens can hit you when you least expect it. Perhaps you suddenly need to repair the brakes on your car, buy a last minute plane ticket to visit a sick grandparent, or even cover your living expenses while you look for a new job. Whatever the emergency may be, having a cushion to fall back on will help you stay financially afloat while everything else around you may seem to be sinking.


Guidelines vary but a reasonable starting point for anyone is to amass three to six months’ worth of critical living expenses including:

  • Bills you cannot put off or defer without serious consequences or complications such as housing (mortgage or rent) payments
  • Food
  • Utilities
  • Insurance
  • Transportation
  • Child care
  • Minimum payments on loans or other credit.

Just about everything else should be considered discretionary expenses and should be the first cut in an emergency financial situation.

If you are having trouble saving because of excessive debt, contact ACCC for help. When you contact our approved credit counseling agency, a certified credit advisor will help you evaluate your current financial situation and provide you with personalized debt solutions based on your goals.


One you have decided how much money you need, it is important to save it in an account that is not easily accessible and earns some interest.

  • Online banks such as Ally Bank and Capital One 360 are a good example of an account that is not easily accessible. They also offer slightly higher interest rates than traditional brick and mortar banks.
  • If you would prefer a brick and mortar bank you can open a savings account at a bank that is not your everyday bank that is not linked to any of your accounts.
  • Lastly you might want to look into No-penalty certificate of deposit. Regular CDs are set up to hold money for a certain amount of time. If you pull the cash out before the designated time period is up, you could pay a lot of money in penalties. This makes a regular cd a bad option for an emergency fund, however no-penalty CDs offer better-than-average interest rates and don’t penalize for withdrawing money early. Be sure you read the fine print, so you know what “no penalty” means.

(continue on to Building Your Emergency Fund)...

American Consumer Credit Counseling (ACCC) is one of the top nonprofit debt consolidation companies in the U.S., with more than 22 years' experience helping individuals and families consolidate credit card debt and improve their credit management skills. If you're wondering "How does debt consolidation work?" and "How can I consolidate my bills?", we can provide you with debt consolidation information to show you exactly how we can help you consolidate debt without having to borrow money or pay steep fees. If you're considering bankruptcy, we are also one of the approved credit counseling agencies for issuing a pre-bankruptcy certificate as well as providing the post-bankruptcy credit counseling course.

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