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4: Make Your Emergency Fund Plan

Pay Yourself First

Hand dropping coin into purse

The secret of saving is to think of it as paying yourself first. It can be hard to resist spending today, until you realize that you are taking money away from the future you. 

When you get your paycheck, a windfall (such as a tax refund or inheritance) or other income, make it a priority to set aside a portion of it for savings. 

That’s paying yourself first — and it works. Your future you will thank you. 

Here are some ideas to get started: 

  • Automatically save from your paycheck. Have your employer automatically deduct money from your paycheck and deposit it into a savings account or other interest-bearing account. Even better, find out if your employer has a program to deduct pretax dollars straight from your paycheck into savings. What you don’t see, you won’t miss.  
  • Automatically transfer savings from your checking account once a month. Set up an automated transfer to move a set amount of money from your checking account into your emergency savings account each month.
  • Use savings apps. Choose a savings app or financial product that automatically saves every time you make a purchase. For example, some apps will round up to the nearest dollar of every purchase and put the remaining change into savings — for example, if your purchase is $3.55, the savings app would add $0.45 to your account.

Who Is the Future You?

Studies have shown that we tend to think of our future selves as strangers. Every time you add to your savings, think of that future you for whom you are saving. What does the future you need and want? It can help to even give your future you a name. Every time you save, think of that person and how grateful they will be for the sacrifices you make today.


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