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Your Emergency Fund: How Much is Enough?4/29/2019

An emergency fund may help alleviate stress.

Presented by the MEMBERS Financial Services Program* located at SLFCU. The MEMBERS Financial Services program is offered through CUNA Brokerage Services, Inc.*, a broker/dealer focused on serving credit union members. CUNA Brokerage Services, Inc. is an affiliate of CUNA Mutual Group. For more information about CUNA Brokerage Services, Inc., please visit

Have you ever had a month when the water heater stopped heating, the dishwasher stopped washing, and your family ends up on a first-name basis with the urgent care nurse? Next, as you’re giving yourself your best, “You can make it!” pep talk, you see smoke pouring out from under your hood.

Bad things happen to the best of us – and they almost always come in waves. In instances like these, it’s important to have a financial life preserver in the form of an emergency cash fund.

Although many would agree that an emergency fund is an important resource, they’re not sure how much to save, or where to keep the money. Others wonder how they can find any extra cash to sock away. One recent survey found that 29% of Americans lack any emergency savings whatsoever.


When starting an emergency fund, you’ll want to set a target amount. But how much is enough? There is no “one-size-fits-all” answer. The ideal amount for your emergency fund may depend on your financial situation and lifestyle. For example, if you own your home or provide for a number of dependents, you may be more likely to face financial emergencies. And if the crisis you face is a job loss or injury that affects your income, you may need to depend on your emergency fund for an extended period of time.


If saving several months of income seems an unattainable goal, don’t despair. Start with a more modest target, such as saving $1,000. Build your savings at regular intervals, a bit at a time. It may help to treat the transaction like a bill you pay yourself each month. Consider setting up an automatic monthly transfer to make self-discipline a matter of course. If you have credit card debt, you might put some of the amount toward that while also starting your emergency fund. Once you see your savings begin to build, you may be tempted to use the account for something other than an emergency. Try to budget and prepare separately for bigger expenses you know are coming. Keep your emergency money separate from your checking account so that it’s harder to dip into, but still easily accessible.


Since an emergency fund should be easy to access, many people choose traditional savings accounts. By comparison, certificates of deposit, also known as term certificates or share accounts, can provide higher interest rates, but access to those funds is typically restricted until their maturity date (at SLFCU, this is between six months and four years), except with advanced notice and/or by having a penalty assessed. Savings and share accounts at SLFCU are federally insured to at least $250,000 by the National Credit Union Administration.


Some people turn to these funds for their emergency savings plan. They are considered low-risk securities, but they’re not federally insured or guaranteed as share certificates or money market savings accounts are, so it is possible to lose money. Depending on your particular goals and the amount you have saved, some combination of lower-risk investments may be your best choice.

Money market funds seek to preserve the value of your investment at $1.00 a share. However, it is possible to lose money by investing in a money market fund. Money market mutual funds are sold by prospectus.

Please consider the charges, risks, expenses, and investment objectives carefully before investing in a mutual fund. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

The only thing you can know about unexpected expenses is that they’re coming – for everyone. Having an emergency fund may help alleviate the stress and worry associated with a financial crisis. If your emergency savings are not where they should be, consider taking steps today to create a cushion for the future.

Contact MEMBERS Financial Services to make a no-cost, no-obligation appointment at an SLFCU branch, or contact a financial professional online.

  • Juan Tabo, Jefferson, Cottonwood, Paseo, Rio Rancho, or Los Lunas branches: Call 505.237.3930
  • Edgewood, Kirtland, Tech Park, or Livermore branches: Call 505.237.7330

To learn more about the background of your financial professional and the firm for which they work, visit BrokerCheck by FINRA.

*MEMBERS Financial Services Financial Professionals are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America. FR-2509725.1-0419-0521

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

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