Here's Why I'm Boosting My Emergency Savings Fund in 2024

Saving for emergencies is one of my financial goals. For over a year, I've been working hard to boost my emergency savings fund while tackling other goals, like contributing to my IRA accounts. I have a solid stash of cash in my savings account, but I want to save even more in 2024. I'll explain why I plan to continue contributing money to my emergency fund.

I want to have enough money to cover my family's bills for a year

One life change can significantly impact your finances. Job loss or a severe illness are two life changes that can impact your bank account. I want to ensure my husband and I are prepared for whatever life throws our way. I can prepare by setting aside money in my savings account.

I've been building my emergency fund for a while now, but I've also been saving for other needs. I have enough emergency savings to pay our household bills for seven months without making significant changes in reducing our spending. While that's a great start, I have more work to do.

This year, I plan to continue building my emergency fund until I have enough to cover 12 months of living expenses. If something serious happens, the savings will buy us time to strategize how to handle the situation. We won't have the added stress of worrying about whether we can afford our bills.

I can stretch those savings beyond 12 months by reviewing our budget and reducing our spending if needed. But I'm setting my savings goal based on our current spending to allow extra wiggle room. Once I reach this goal, I can put more income toward other financial goals.

How much should you save for emergencies?

If you're working on building your emergency savings, that's great news. You're already well on your way toward protecting yourself financially in case unanticipated bills come your way.

Wondering how much you should save? No set amount of money is ideal for every situation.

While many experts suggest saving at least three to six months' worth of expenses, you must decide how much savings is comfortable for you and your family.

To decide on a savings goal, consider the total cost of your monthly expenses. Then, determine how many months' expenses would make you feel more at ease financially.

Some may find a six-month stash is ideal, while others may feel better having more cash in the bank. Remember that it's OK to set a big savings goal and work at it slowly. Any action you take to reach your goal is progress -- even small steps count.

Automation makes saving stress free

If you want to save money this year, here's a tip that may help -- automate your savings. When you rely on making manual contributions, it's easy to get forgetful and could result in you saving less than you intended.

Automation can help because it takes the work and stress out of saving. You can easily set up automatic transfers from one bank account to another by logging into your online account through your bank's mobile app or website.

Consider opening a high-yield savings account and stashing your cash there so you earn interest while your money sits in the bank. Looking for more money tips? Check out our personal finance resources.