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Why You Need an Emergency Fund and Step-by-Step How to Start One · Stacked Intent: Your Guide to Authentic, Intentional Living

• 0:00
  SPEAKER_00: Hello, my name is Becca Stackhouse Morton, and I am ready for you to tune in each episode to hear ways to become you.
• 0:09
  SPEAKER_00: Looking at ways you can be your authentic and intentional self, you'll finish each episode motivated to live life more authentically.
• 0:18
  SPEAKER_00: I learned how to be truly me through relationships, chronic disease, finances, and taking each journey along the way.
• 0:26
  SPEAKER_00: Talk about the real aspects of life?
• 0:29
  SPEAKER_00: Of course.
• 0:30
  SPEAKER_00: Relationships, finance, nutrition, hardships, exercise are all topics that we will discuss.
• 0:37
  SPEAKER_00: Pull up a seat, drive safely down the road, or get into that workout groove to be challenged, motivated, and encouraged to be you.
• 0:46
  SPEAKER_00: This is the Stacked Intent podcast.
• 0:53
  SPEAKER_00: Hello guys, and welcome to the 16th episode of Stacked Intent, where we are going to talk about and drop some tips on how you can intentionally be stacking your life.
• 1:05
  SPEAKER_00: So I am Becca Stackhouse Morrison, the owner of Stacked Intent, and your host for the podcast.
• 1:11
  SPEAKER_00: So today we're going to be talking about some savings goals, why save, ways to save, and really looking at what an emergency savings account is.
• 1:20
  SPEAKER_00: So we're going to talk about why savings is important, utilizing your savings account, and even setting it up automatically so you don't even have to think about that part of your money.
• 1:35
  SPEAKER_00: Why should you save?
• 1:37
  SPEAKER_00: Think about it.
• 1:40
  SPEAKER_00: Some people are, some people aren't going to, but did you know that only four in ten Americans have enough emergency savings to cover a thousand dollars worth of unexpected expenses?
• 1:56
  SPEAKER_00: And nearly 50% of Americans are saving less money today than they were prior to a couple years ago.
• 2:08
  SPEAKER_00: So I want you to pause for a second and define what an emergency savings fund are used for for you and your money, or you and your partner, you and your family.
• 2:23
  SPEAKER_00: What is your reason?
• 2:30
  SPEAKER_00: Is it because you've got unexpected medical expenses?
• 2:34
  SPEAKER_00: Unforeseen repairs?
• 2:37
  SPEAKER_00: An unemployment that happened?
• 2:42
  SPEAKER_00: What is your reason you need an emergency fund?
• 2:49
  SPEAKER_00: Because overall, just like personalities, we each have a money personality.
• 2:57
  SPEAKER_00: And so this can be differently.
• 3:00
  SPEAKER_00: And depending on how you feel about saving versus spending, that's gonna depend on what matters on you having a backstop for life's uncertainties of an emergency savings account.
• 3:13
  SPEAKER_00: Your growing up also has a huge influence on how you see and save and look at money.
• 3:24
  SPEAKER_00: The unexpected is bound to happen and sabotage what your financial goals are.
• 3:35
  SPEAKER_00: Setting and getting set up in the amount to have a rainy day fund, it's important and it's crucial for you.
• 3:47
  SPEAKER_00: I've had some really hard things slap me in the face for finances.
• 3:52
  SPEAKER_00: So I'm finding that that emergency fund, that category, is not a category that I love to touch.
• 4:02
  SPEAKER_00: And this can be an amount that you've got that's$500,$1,000, or it's even$20.
• 4:11
  SPEAKER_00: So it's important to have this emergency fund with your definition set up so that it can cover anywhere from three to six months of your complete living cost.
• 4:25
  SPEAKER_00: So how do you get that number?
• 4:27
  SPEAKER_00: Well, you got a budget and look at what your bills are, what your streaming services are, what your groceries, gas, what your living cost to exist is, and then multiply it times six.
• 4:43
  SPEAKER_00: So does it take you$2,000 to live every month?
• 4:48
  SPEAKER_00: Does it take you$1,500 to live?
• 4:53
  SPEAKER_00: If it takes you$2,000 to live each month, then you're looking at needing an emergency savings fund of$12,000.
• 5:04
  SPEAKER_00: So take your monthly expenses and multiply it towards a goal of saving that$12,000 to have in an emergency fund.
• 5:19
  SPEAKER_00: This can provide you with your own safety net during the life's hardships that happen to us.
• 5:28
  SPEAKER_00: These are the things that may come unexpectedly with life, whether it be that medical cost, an unemployment happens, or you know, you come home to your bathroom flooded and you need a home repair.
• 5:43
  SPEAKER_00: Those are things that fall in this emergency category.
• 5:47
  SPEAKER_00: It's the things that we can't preemptively plan for.
• 5:53
  SPEAKER_00: Our life goals don't come freely either, unfortunately.
• 5:58
  SPEAKER_00: So savings can be one of those other opportunities to give you the opportunity to travel, to put a down payment down on a house, upgrade your car.
• 6:12
  SPEAKER_00: There's so many things that our goals come with.
• 6:19
  SPEAKER_00: And they can be a short-term or a long-term goal.
• 6:23
  SPEAKER_00: So some short short-term goals may be that vacation you want to go on, the down payment for a car or for a house, putting a deposit down on an apartment, uh making a loan repayment, home improvements, or even saving for a wedding.
• 6:50
  SPEAKER_00: Some of your long-term goals may look like retirement, opening a business, being able to pay for your child's education, maybe even being able to buy a vacation home, pay off student loans, or pay off your mortgage.
• 7:17
  SPEAKER_00: So you have short and long-term goals, and you really have to define for you when do you want to be able to retire?
• 7:24
  SPEAKER_00: Well, that matters in how you're able to contribute to your retirement.
• 7:35
  SPEAKER_00: When you're contributing, excuse me, when you're contributing to a retirement plan, it can also reduce your tax liability because you're contributing to a retirement account.
• 7:51
  SPEAKER_00: Also having some savings, one of my favorite things to do is travel.
• 7:58
  SPEAKER_00: But to be able to travel, you have to have money to do that.
• 8:03
  SPEAKER_00: And so one way that I have always had that in my budget is I have a category in our budget for traveling.
• 8:14
  SPEAKER_00: And when it was just me and I wasn't married, I contributed a little bit less to it a month than we try to contribute to it now.
• 8:21
  SPEAKER_00: But it meant that when I wanted to go see my sister in another state, or I wanted to go see my good friend when she was out on the other coast, or I wanted to be able to enjoy some of the bachelorette parties that my friends have had recently, or go to the beach with my other friend.
• 8:42
  SPEAKER_00: We have some money in our account to do that that is deemed travel money, and that's what gives the freedom to go on those trips.
• 8:54
  SPEAKER_00: It may also be that bonuses, inheritance, um, tax refunds go ahead and automatically put part of it, if not all of it, into your savings.
• 9:12
  SPEAKER_00: It provides you with this baseline of having some financial stability.
• 9:20
  SPEAKER_00: One way you can do it is five dollars a day set aside into savings.
• 9:26
  SPEAKER_00: Now, once you've established your emergency fund and you've built this up, you can use some of that overage as seed money for bonds, stocks, or mutual funds and a higher yield of investment.
• 9:45
  SPEAKER_00: So, seven steps that you get started when you're working on this emergency fund.
• 9:51
  SPEAKER_00: Start with what does your budget look like?
• 9:55
  SPEAKER_00: See when, where, how you can start saving some money.
• 10:00
  SPEAKER_00: Determine what your emergency goal fund is, make it a direct deposit to your savings, gradually increase it as you see a raise, as you get extra money, or as you find other ways to save some money.
• 10:19
  SPEAKER_00: Save for unexpected income.
• 10:22
  SPEAKER_00: So if you get extra income, put it in savings.
• 10:26
  SPEAKER_00: Pretend like it didn't even exist.
• 10:29
  SPEAKER_00: Keep your savings after you reach that goal.
• 10:34
  SPEAKER_00: So once you reach that$12,000 goal, keep on putting that money away, and maybe you'll have$24,000 and that's 12 months of your expenses covered.
• 10:49
  SPEAKER_00: And you may be able to find a bank that's got a jump start to some savings.
• 10:54
  SPEAKER_00: So check those out.
• 10:57
  SPEAKER_00: Our second category is open a savings account.
• 11:02
  SPEAKER_00: And I would highly encourage it to be a high yield savings account so that you'll get more of a percentage of an interest back.
• 11:17
  SPEAKER_00: High yield savings places are a great place to save your money and have your money so that you can work with it, can be deemed for a house payment, your rainy day fund, or even what your next car is gonna look like.
• 11:33
  SPEAKER_00: I do encourage you to do your research and Google some of the best ones for you and see what is better.
• 11:44
  SPEAKER_00: The FDIC approved, check for a high percentage, sign on bonuses and what those might look like, and make sure it works for you.
• 11:58
  SPEAKER_00: It may be an online bank, it may be more your local.
• 12:01
  SPEAKER_00: A lot of times the online banks have better percentage high yields back.
• 12:09
  SPEAKER_00: So I mean it's looking at like right now when you look at what some of your comparable best high yield savings accounts are.
• 12:20
  SPEAKER_00: Discover's got a 3.6% annual average.
• 12:24
  SPEAKER_00: American Express has a 3.7.
• 12:28
  SPEAKER_00: But also look for: is there a maintenance fee?
• 12:33
  SPEAKER_00: Is there a minimum amount of money you have to keep in it each to keep it going?
• 12:42
  SPEAKER_00: So look at those.
• 12:44
  SPEAKER_00: Look at what some of your higher yield savings options are.
• 12:51
  SPEAKER_00: And then lastly, in this topic of savings, how do you set it up automatically?
• 13:00
  SPEAKER_00: If you are paid by your employer and able to set up an automatic deposit, decide what that amount is and put your paycheck automatically into your retirement or into your high yield savings account.
• 13:22
  SPEAKER_00: Let it direct deposit into multiple accounts, but make sure you do check it to make sure it all adds up correctly.
• 13:31
  SPEAKER_00: So today we kind of talked about why savings is important.
• 13:35
  SPEAKER_00: Utilize a high yield savings account and set it up automatically so it becomes a mindless process, and you never have to think about money being saved.
• 13:49
  SPEAKER_00: So your call to action and challenge from this week's episode is that I dare you to make your savings deposits the top priority on your list of things in your budget, even if it is a very small deposit.
• 14:12
  SPEAKER_00: Start small and just create the habit.
• 14:17
  SPEAKER_00: Thank you guys for joining me today on this episode of Stacked Intent.
• 14:24
  SPEAKER_00: And I look forward to hearing how you started or continued your savings journey.
• 14:31
  SPEAKER_00: That brings us to the end of this episode of Stacked Intent.
• 14:36
  SPEAKER_00: If you loved this episode as much as I did, head on over and rate and subscribe so you will never miss an episode.
• 14:44
  SPEAKER_00: New episodes are going to be dropped on Thursdays.
• 14:47
  SPEAKER_00: Until then, this is Becca, and don't forget, enrich your life by being intentional.
• 14:55
  SPEAKER_00: This podcast was created, produced, and recorded, and edited by Stacked Intent.