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Personal Finance from the Broke Perspective

Why You Should Build Your Emergency Savings Account

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Protecting your finances starts with ensuring that you are prepared for any type of financial emergency that comes your way. It can be difficult to predict the future, but you can start an emergency fund to better protect your finances for those times in the future when life throws the unexpected your way. Here is why you need an emergency fund.

1. Peace of Mind

There are a lot of things that can come up unexpectedly in life that can ruin your finances. For example, an expensive vehicle mishap. According to Value Penguin, there are about 5 million car accidents in the United States annually. While generally if you are injured in a car accident there may be compensation available for economic and non-economic damages, but that may take a long time to get.

While you wait for a settlement from the insurance company after an accident, the bills still need to be paid. Knowing that you have an emergency fund to rely on can help reduce stress and provide peace of mind. Having your finances in order can improve any situation by bringing peace of mind.

2. Protecting Your Home

Many unforeseen emergencies happen in the home. Unfortunately, if you don’t have an emergency fund set up to cover things like a water heater replacement or another repair, the safety and function of your home will suffer. Addressing problems in your home as they arise protects your investment.

Having an emergency fund to cover the cost of repairs to your home will ensure that you are protecting your home investment. Roof problems are common for homeowners and can be expensive to fix. According to Roofer’s Guild, hailstorms and other weather events are the number one cause of roof damage. The United States experiences about 3,700 hailstorms annually. The risk is real that you may experience damage to your home that can tank your finances unless you are prepared.

3. Reduce Your Debt

An emergency fund not only protects your finances from being drained, but also keeps you from taking on debt. It is natural to reach for credit cards when an emergency pops up. However, using credit cards to pay for unexpected expenses can get very expensive. The interest that you will pay on a credit card makes whatever emergency you are experiencing far more expensive.

Avoiding debt is essential to build financial security. Starting an emergency fund to cover unexpected expenses will help you avoid credit card debt. Ultimately, an emergency fund will help to shore up your finances and help you save money.

4. Building Financial Stability

If you have been working toward financial stability, all that hard work can be for nothing, if you have not planned your emergency fund. Most people know how important it is to save money for their future. However, if you must tap into your savings for an emergency all that hard work is for nothing.

Changing your mindset about money and categorizing your money into different funds can help you build a stable financial future. Your plan should include an emergency fund or several different types of emergency funds. Dedicating your finances to different funds can help to avoid financial problems.

An emergency fund for the house, the car, medical expenses, and more can prove to be one of the best ways to protect and grow your finances. You can protect the things in life that are important to you, worry less, and ensure that when a financial emergency occurs you are fully prepared by starting an emergency fund. Luckily, emergencies don’t happen every day so you have time to feed your fund. Learn more ways to ensure your finances can provide the lifestyle you want now and in the future.

5 Reasons to Have a Savings Account

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You’ve heard that one of the best ways to manage your finances is to open a savings account. Today, so many financial institutions have general savings accounts that make for good options. You don’t have to carry a minimum balance, and it’s easy to get your money when you need it. If you aren’t sure why you need a savings account, read the five reasons below.

1. Emergency Fund

A savings account is a great place to put any extra money you have away and use when you need it. There are so many expenses that you can get unexpected, and having that extra place with money will keep you from having to use other ways to pay those expenses. A savings account that you can access will keep you from accumulating credit card debt, taking out personal loans, and having to pay unnecessary interest. In the event that you lose your job, you’ll also have some money to cover your expenses until you can get another job. In fact, 34% of burglars get through the home through the front door. It’s a good idea to have at least six months’ worth of expenses saved in the savings account for emergencies.

2. Car Maintenance

If you own one or two vehicles, you’ll need maintenance expenses. It doesn’t matter how new they are, and if you have older vehicles that no longer have a car payment, you’ll see this pretty soon. Natural wear and tear happens on vehicles, especially for folks who put more than 15,000 miles on a vehicle each year. According to Globe Newswire, the global automotive maintenance and repair market is expected to reach $1237.49 billion in 2026. When these expenses arise, you’ll need money to cover them, and maybe even some extra for a car rental if the shop is going to have your car for a few days.

3. Future Expenses

If you’re considering having children in the future, you’ll want to make sure you put some money back for childcare expenses. Working and getting daycare is a requirement for almost all families at this point, and with the daycare costs steadily rising, you need to be prepared. You want your child to have the best care while you’re working, as this is an investment in their growth. About 25% to 50% of kids require orthodontics and that’s another expense you’ll want to prepare for.

4. Low-Risk

Savings accounts are small risks because they don’t require a lot of money to invest and they are easy to open. Also, you can expect that up to $100,000 to be FDIC insured, even if your bank account is hacked and the accounts were stolen. This makes it a great option to have money sitting in these accounts and getting what you need squared away. If you decide you want a separate savings account, you can even do that, so that you’re putting certain funds with certain goals in each account and not mixing them.

5. Small Interest Returns

Most general savings accounts come with small interest returns. Some of the current rates are around 4%, so if you want to get a little money back for storing your money in this account, you should consider doing this and opening an account. When you’re first adding money, you won’t see a lot of interest added to the account, but as the amount starts to grow, so will the monthly interest that’s deposited right back into the account.

Even if you don’t think you have a lot of money to put into a savings account, you should consider opening one up. Most banks don’t require a minimum balance, and you’ll have a secure place to store extra funds if you need to later on. Start browsing with your local bank or online options to open a savings account at this time.

What to Do If You Locked Your Keys In the Car

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A busy day and a preoccupied mind could lead you to have a car lockout, in which case you may end up having an even more stressful day than you already were. This means that anyone can lock their keys in the car at some point or another, and it’s good to be prepared. That said, here’s what you should do if you lock your keys in the car so that you can get the best outcome and keep the issue nothing more than a slight inconvenience.

Check Whether Your Car Has a Helpful App

Most modern cars come with mobile apps that can be connected to the mobile phone, and which may be useful in terms of something like helping you unlock your vehicle. Bearing this in mind, you need to check whether your car actually has this feature as you can save yourself a lot of hassle. This app may come with a number of helpful features, which could make your life significantly easier. That’s especially the case if you’re among the 8.7 million adults in the United States who, according to Forbes, have ADHD. If it’s possible for you to make such an update to your car, you may want to consider working on it after you deal with the lockout.

Call Roadside Assistance or a Locksmith

Another practical step for you to take when you experience a car lockout is to call roadside assistance or a locksmith in the area. It shouldn’t be hard for you to find someone who has experience unlocking vehicles, since there are more than 16,000 car and home lockouts per day in the United States. This is the main reason why it’s best to have the numbers of a local towing company or roadside assistance with you at all times. The help that they can offer you in this case can save you a lot of hassle and give you the chance to get back to your lifestyle without too much trouble. Even if you don’t have the numbers of these professionals on your phone, it should be easy enough for you to find some online.

Be Careful if You Attempt to Unlock it Yourself

If you’re generally a handy person who doesn’t shy from DIYing whatever you can, you may decide to work on the unlocking yourself. In this case, you need to have the necessary tools to begin with, which are things such as a Slim Jim, a modified wire coat hanger, a windshield wiper blade, or even a string. It will take some improvisation to get the job done, as well as care to make sure that you don’t damage your vehicle or even injure yourself. You can get proper tools for situations like these easily from the internet or any of a number of small businesses in your area. That’s because there are 33.2 million small businesses in America, according to Zippia.

Prevent Future Lockouts

Finally, it’s prudent to do your best to avoid future lockouts, since these can be a hassle to deal with. To this end, always carry a spare key with you and make sure that the locking mechanism of your car door works well. You should also try and avoid leaving the house in a rush, which could cause you to be forgetful and set you up for an issue during the day.

These are some of the steps to take if you get locked out of your car. In such a scenario, it’s best that you stay calm and remember that a busy lifestyle could result in forgetfulness, so you need to give yourself some grace as well. When you handle the issue properly, you can be sure that you’ll come out of it having learned a thing or two, perhaps even managing to avoid a similar occurrence in the future.