You're driving down the road and your tire blows out. You're sitting at home and see water leaking through the roof. You're trying to cook dinner, but your oven won't turn on. These are all events that can happen to anyone, but you can be prepared to handle these circumstances if you have an emergency savings fund.

First, let's clarify emergency savings from your regular savings. Your regular, day-to-day savings account might have funds that you've been saving to purchase that new TV or latest espresso machine.

Your emergency savings fund is different and should be kept separate from your fun savings.

Let's explore common questions when it comes to emergency savings.

Who should have an emergency savings?

Everyone! No matter your age, income level, or employment status, everyone should have an emergency savings fund.

Why do you need an emergency savings?

An emergency savings can help you during any unexpected life event, such as weather-related disasters, car/transportation issues, a layoff, or a medical emergency.

If needed, it can also help you supplement your income due to a sickness or leave of absence.

"I have an emergency credit card. Is that enough?"

When dealing with an unexpected life event, the last thing you want to worry about is how you'll pay off that expense on your credit card while possibly paying a high-interest rate at the same time.

How much should you have in your emergency savings?

It's commonly advised that you have three to six months' of expenses in an emergency savings fund (Source: Bankrate).

What should you contribute?

Save frequently and stick to a schedule. After determining how much you can regularly contribute to your emergency savings fund, try to stick to that schedule. Maybe you've decided that you can contribute $5 per week instead of delighting in a cappuccino, or maybe you'd like to contribute $50 per paycheck. Whatever you decide, make sure it's something that you can regularly commit to.

You can also use our investment calculators to get a head start on your emergency savings.

Where should you keep your savings safe and accessible (but not too accessible)?

Emergency funds

You want to keep your money safe and accessible, but not so accessible that you're dipping into your emergency savings for things are not considered an emergency.

Gone are the days of hiding cash under your mattress. A high-yield savings account is a great, safe way to start your savings. They typically have a lower minimum requirement, but still give you some return on your investment.

Certificates of Deposit (CDs) are another way to keep your money safe. They typically earn higher interest than a regular savings, and the longer the term, the higher the interest rate. For emergency savings, it's best to keep your CD short-term, so that you can access it when needed.

It's never too late (or too early) to start your emergency savings fund. Be prepared to handle the unexpected by speaking to one of our Personal Bankers about setting up a savings account for your emergency funds.