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How to build an emergency fund, fast.

An emergency fund gives you a safety net for when life throws a spanner in the works. So, if your car suddenly breaks down or a window starts to leak, that extra cash you saved for a rainy day could come in handy.

In uncertain times it’s completely normal to be worried about the future. If you’re wanting to protect yourself financially, setting up an emergency fund could be a great place to start.

An emergency fund is a separate stash of cash you build up over time. It could help cover unexpected costs, like major home repairs, or be used to supplement your income. Apart from the added security of having some spare money, an emergency fund could help you stay afloat and avoid going into debt.

How much should I save?

It’s totally your call. But most money experts recommend that saving three to six months of regular expenses is a good buffer. Saving this amount might seem hard, but you don’t have to do it overnight. Transferring $50 each week means you could save $2,600 in one year. Nice!

Where should I keep my emergency fund?

You know the old saying, out of sight, out of mind? The same applies here. Separating your emergency fund from your spending money could help you hit your savings goals. Also, look for a savings account with a high-interest rate so you don’t have to do all the work.


Fin fact:
Our UBank USave + USpend account combo provides you with the opportunity to earn our awesome bonus interest rate* on up to 10 accounts so you get more bang for your buck. Also, our in-app budgeting tool Free2Spend could help keep you on track to hit your savings goals.

What are some ways to quickly boost your savings?

Building an emergency fund takes time, but there’s a few things that could help give it an extra boost:

  • Set up automatic transfers on the days you get paid. Having the money instantly withdrawn from your account will help make sure your emergency fund is regularly topped up.

  • If you open up multiple USave accounts, give them nicknames like Rainy Day, Car or House Deposit, so you can keep track of them. As long as you meet the bonus interest criteria each month, you’ll get the bonus interest on all your USave accounts in the following month.*

  • If you have a linked USave and USpend transaction account, make sure you have Sweeps switched on**. Our innovative Sweep Technology means you can have most of your money earning maximum interest in your USave, with everyday spending money automatically swept (transferred) into your USpend ready for when you need it. Pretty cool, right?

  • Sell your old clothes and furniture in online marketplaces or community groups. Your trash could be someone else’s treasure.

  • With many of us spending more time at home, why not move the money you’d usually spend on going out, transport, takeaway coffees and lunches into your emergency fund?

  • If you get money back at tax time, you could transfer it straight into your savings.

If your emergency fund is a little low, give these tips a go and look for everyday savings. It’ll help put your mind at ease knowing you can get yourself out of a sticky situation, stat. Your future self will thank you, trust us.

 

Information is accurate as at 26 May 2020 and subject to change.

*To be eligible for the bonus rate, you must make deposits of $200 or more into your linked USave and/or USpend account in a month and maintain a balance less than $250,000 in that month across all your savings and USpend accounts including joint accounts. The bonus interest rate is received the following month. No interest is payable on your linked USpend account. Maximum balance is $5 million per customer. No minimum balance applies.

**For your security,we don’t Live Sweep credit transactions. This includes tap and pay on your physical card and digital wallets like Apple Pay, Google Pay and UBank’s Tap & Pay.

You should consider the relevant Terms and Conditions that apply to these products, available at ubank.com.au


The information contained in this article is of a general nature only. It doesn’t take account of any person’s objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate for your circumstances and seek independent legal, financial, and taxation advice.