The Need for an Emergency Fund

The Need for an Emergency Fund

Building a Savings Plan

The Need for an Emergency Fund

It is generally recommended that you have cash funds sufficient to cover three months of expenses. Some of these funds cover operating expenses, while the remaining serves as an emergency fund.

Ideally, the money you need should be in places that are easy to get to, e.g., bank and credit union savings accounts, and bank, credit union and money market accounts. These are liquid. You can turn them into dollar bills easily.

Although they are generally regarded as lower-risk, you should know that money market accounts are not federally insured (the way most banks are for deposits of up to $250,000).

If you don't have any cash reserves, here are some other sources of emergency funds:

  • A home equity loan or line of credit (You should establish this now if you think you will need it in the future).
  • Cashing in investments
  • A loan on a margin account (if you own securities)
  • A loan from a permanent insurance policy
  • A personal loan from your bank or credit union
  • A loan from your savings plan
  • Credit cards (the LEAST favorable option)
Share Article:
Add to GooglePlus
Deposit and Loan Products are offered to qualified customers by First National Bank. See specific deposit and loan product pages on this website for more detailed information. First National Bank is a MEMBER FDIC and an EQUAL HOUSING LENDER.


Investment and insurance products and services are offered through Osaic Institutions, INC. Member FINRA/SIPC. FNB Wealth Management Services is a trade name of First National Bank. Osaic Institutions,Inc and the bank are not affiliated. Products and services made available through Osaic Institutions, Inc. are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

NOT FDIC-INSURED. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. NOT GUARANTEED BY THE BANK. MAY GO DOWN IN VALUE.

BrokerCheck