Saving for the Unexpected

No one wants to think about worst-case scenarios.
But for optimum financial health, you have to.
What happens to you and your family if the unexpected occurs?
While you can never anticipate when a financial emergency will occur, you can be prepared for it if it happens.

Build That Safety Net
Without a financial safety net, unexpected events have the potential to upset your financial health and stability. For that reason, financial experts recommend establishing an emergency fund to cover two to six months of expenses. That may mean different things to different people. Ask yourself how much money you and your family need to function comfortably each month.

To do this, you’ll need to determine how much you will need for fixed expenses, such as mortgage and car payments, and variable expenses, such as phone, food, and utilities. Keep careful track of all of your expenses for a month or two, and you’ll know how much to keep on hand for an emergency situation.

If you do not have job security, have an inconsistent income, or are a worker in an extremely specialized field, you may want to save more than six months worth of expenses.

Pay Yourself First
Get in the habit of paying yourself first, setting aside a fixed amount from each paycheck before you spend it on anything else. If you haven’t already, consider opening a Wachovia Free Checking account and coupling it with a Premium Savings, this can help saving for your future. Also, you could have your paycheck deposited directly to your Wachovia Free Checking account and from there you can ‘pay yourself first’.

Track Your Spending
Once you’ve monitored your budget for a couple of months, you’ll be able to see where you can trim spending and deposit extra money into your emergency fund. “Found money,” such as a tax refund or annual bonus, should go into your fund. When you get a raise, don’t increase your spending, increase your fund contribution. Remember, a little bit here and there adds up quickly when you save on a regular basis.

Stash Your Cash
You’ll want to house your money in a fund where it will continue to grow, be safe from economic ups and down, and provide easy access if and when you need it.

Safe, short-term liquid investments, such as savings accounts or money-market funds that earn interest with easy access are appropriate for an emergency fund. Wachovia offers a variety of services and products to help you make wise decisions. Contact a Wachovia Financial Advisor to help you determine the best way to ensure emergency preparedness.

Once you establish your emergency fund, forget all about it. Keeping the reserve fully funded at all times, will guarantee that if the unexpected strikes, you’ll be fully prepared.