Many people wonder how they can build an emergency fund when they are trying to pay off their debts. It’s not as hard as you might think! The strategy is to start small, change some habits and change your mindset.

When building an emergency fund from scratch, start by saving living expenses for a month by paying the minimum on your credit cards. Once you’ve started that first month of emergency funds, turn to focus on your credit card debt and pay more than the monthly minimum. Once you’ve paid off your credit card debt, go back to building your emergency fund.

If your credit card debt is very high and cannot be paid in full within a couple of months, alternate the extra payment every two months: the first month, add your emergency fund and pay the minimum on your credit cards. credit. The next month, pay more with your credit cards and skip the deposit to your emergency fund.

Here are five more ways to increase your emergency fund and change your savings habits for life:

• Treat your savings like an invoice. Find out what you can afford to save each month and put away $ 75, $ 50, $ 25, or even $ 10 a month. Regardless of the amount, it adds up and can become a habit. As your financial situation improves, increase the amount.
• Experience a raise behind. When you get a raise, resist the urge to start spending more. Instead, apply the extra amount to your emergency fund.
• Automate it. Set up an automatic transfer to your emergency funds account. When the Credit Union receives your direct deposited paycheck, you can have a portion of it directly in your savings or emergency account. Out of sight, out of mind, but you know it’s there if you need it.
• Give your savings a boost at the garage sale. Go from room to room in your home and delete the things you no longer want and need. Then I plan a garage sale. Both your home and your savings will look better.
• Think of it like a life jacket. If you can’t find that initial spark to get started, ask yourself how you would pay your bills if you lost your job tomorrow. Having an emergency fund will help keep your head above water.

Your emergency fund target should cover your take-home pay for at least three months, but ideally six. Use ours Emergency Fund Calculator to explore how much you need to save each month to reach your emergency fund savings goal.

Remember: Azura Credit Union is ready to help you with all your savings needs. Call us at 800-432-2470 or visit the nearest branch to create short- and long-term savings vehicles that suit your needs.