Build Your Emergency Fund with ucublu High-Interest Savings Account

 

The pandemic lockdown has put a spotlight on the financial habits of Canadians- and it reveals that people who had a more disciplined savings routine were better able to manage their finances during the uncertain economic times.

Canadians who listened to the advice of financial planners and created an emergency fund were in a better position to meet their financial obligations. They were also less likely to dip into their retirement or investment plans to pay their bills.

New Financial Habits – Start an Emergency Fund

The lessons learned from the COVID-19 lockdown has fostered new pandemic financial habits - top of the list is saving for an emergency fund.

Many financial experts recommend having a minimum of three to six months of your basic living expenses put away in an emergency fund - while other financial advisors say having nine months’ worth of living expenses is a more realistic figure to safeguard against future financial hardship.

Start or Replenish Your Emergency Fund with a ucublu High-Interest Savings Account

Building an emergency fund is different from investing. With investing - your money is tied up in stocks, mutual funds or exchange-traded funds and not easily accessible when needed. An emergency fund, on the other hand, should be liquid and easily accessible - like UCU’s virtual ucublu High-Interest Savings Account.

ucublu High-Interest Savings Account is an online-only account designed for long term savings and not intended for daily transactions. It has all the advantages of a term deposit without the need to lock in your money for a fixed period of time. It also pays a higher interest rate than a traditional savings account. Learn more about the many ucublu benefits and how to open an account. [link to ucublu article]

How to Start an Emergency Fund

Having a well-funded emergency fund takes time to build. Make small monthly deposits into a higher interest-earning account like the ucublu High-Interest Savings Account, and don’t pull out the money until you reach your financial goal.

• Determine your essential monthly expenses such as housing, utilities and food
• Trim or eliminate discretionary spending such as cable, dining out and entertainment expenses
• Determine the amount of take-home pay can you put away and make regular deposits into your fund
• If you can, deposit other income such as a tax refund or bonus to boost the fund balance

A Savings Buffer to Keep Your Financial Plan on Track

Creating a well-financed emergency fund will allow you to cover your monthly expenses in the event you lose your job – and it will also preserve your investment funds and keep you from incurring additional debt.

• Retirement Accounts – Reduce the need to tap into your retirement fund and pay a penalty as well as incur a higher income tax bill
• Investment Accounts – You won’t need to sell stocks or other funds to generate emergency income
• Lines of Credit – You won’t be tempted to tap into your line of credit and increase your debt load

Read more about the ucublu High-Interest Savings Account