As a spouse or parent, we are responsible for planning and saving for the unexpected. The older we get, the more experience we have with unpredictable challenges and emergencies.
Whether it's a sudden medical expense, unexpected home repairs, or a job loss, having a substantial emergency fund provides a financial cushion to help your family weather the storm.Â
How Much to Save
Think of savings as the space between your family and financial danger. The more savings you have, the further you are from financial danger.Â
Most experts agree that if you’re the sole income provider for yourself or your family, you need at least six months of savings. Other experts recommend a year of expenses saved for emergencies.
You might get away with three months of expenses saved if your spouse works.Â
Where to Save
I mentioned in a previous post that Chase is our primary bank. We recently started using Raisin for our emergency savings because Chase and other banks of their size don't offer comparable savings rates with comparable requirements (e.g., minimum balance requirements). We need a high-yield savings account.
Comparing Savings Rates
Below is an image comparing savings accounts offered using the Raisin tool, Bank of America, and Chase. Consider other big or online banks when expanding your search.
Assume $50,000 in the savings account. Here is how they compare, dollar for dollar:
How Raisin Works
Raisin is a leading financial savings platform that connects users with a wide range of FDIC-insured community banks and NCUA-insured credit unions across the United States.Â
The platform is a one-stop shop for savers, providing access to competitive interest rates and deposit products from partner banks and credit unions. With a user-friendly interface and a seamless registration process, Raisin offers a convenient way to grow your savings without the hassle of dealing with multiple banks and credit unions individually.
Compare Fees (and terms)
Your bank or credit union may charge you a monthly maintenance fee to maintain your savings account. The payment is usually deducted directly from your account each month. Monthly fees vary but typically range from $5 to $25.
Compare Yields (interest rates)
The higher the APY%, the better for the saver. For example, if you deposit $10,000 into a savings account earning 5%, you earn an additional $500 for the year.Â
Most savings accounts pay interest payments monthly. Using the same example from above, the yield percentage is .41% monthly. The interest earned each month is $41.67.Â
Confirm Insurance
Confirm that the credit union is insured by the NCUAÂ or the bank by the FDIC. When they are, the money in your savings account is insured up to $250,000.Â
How to Save as a Couple
Communicate
Money Dates are the best way to have this conversation. It would be ideal if you could spend some uninterrupted time together on a weekend morning. Discuss your current financial health, money beliefs, and values while setting savings goals together.
Set a Goal, Plan, and Track
Studies have shown that people who establish a saving plan are twice as likely to succeed. Create a savings plan using the S.M.A.R.T. goal planning method.Â
Keep track of your progress regularly. It is important to give each other grace and flexibility when you face bumps in the road, which we all do.Â
Automate Your Savings
Directly deposit how much you have planned to save each paycheck into your dedicated savings account. You can also automatically transfer that same amount from your primary account to your dedicated emergency savings account.Â
Learn More
For engaged and recently married couples who want to manage money and the home as a team.
Self paced online courses for couples designed by national financial therapy and financial planning experts. Be sure to click on the Money Marriage U Save option.
Winning ideas from experts to manage money and the home as a team. 2023 Plutus Award Finalist: Best Couples or Family Content.
🔔 Click here to listen and subscribe to the Modern Husbands Podcast on Apple.
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