Sexton Advisory Group: Simple & Smart Ways to Build an Emergency Fund

SAN DIEGO, March 1, 2022 /PRNewswire/ -- According to a recent survey conducted by SSRS Omnibus, 51% of Americans have less than three months' worth of emergency savings. Steve Sexton, financial consultant and CEO of Sexton Advisory Group in San Diego, California, shares his tips to help Americans financially prepare for life's unexpected events. 

1. Keep your savings account and emergency fund separate. "While a savings account should house funds meant to go toward a certain goal, such as a new car or a kitchen renovation, an emergency fund should be strictly reserved for unforeseen crises, such as health problems, home damage, and unemployment," says Sexton. "Having separate buckets will prevent you from dipping into your emergency fund unnecessarily."
2. Calculate your critical expenses. In order to know how much money to save for an emergency fund, Sexton recommends calculating your critical expenses, such as rent/mortgage payments, utilities, food, insurance, and other necessary monthly bills. "I normally advise my clients to save a 3-6 month runway worth of expenses in their emergency fund, but given the unpredictable nature of the job market the past couple of years, it would be wise to save on the higher end of this range."  
3. Consistency is key. "Contributing to your emergency fund should be a consistent priority, even above a savings account," says Sexton. "I advise individuals who are unsure they have the spare funds to direct to such a fund to reassess their credit card statements for the past three months. In most cases, it is possible to make room within your budget to allocate money towards your emergency fund. Eliminate all non-essential expenses and shop around for competitive auto, home, and health insurance options at a lower cost. If you have to save at a slower pace - even if it's only $25 a week - it is important to make an emergency fund a top priority."
4. Invest your emergency fund. "The best place to store your emergency fund is in a short-term, low interest, principal-protected account that can be accessed as needed," adds Sexton. "You can't plan or anticipate life's unexpected events, but you can prepare yourself financially to lessen the blow."

For more information on Sexton Advisory Group, visit https://www.sextonadvisorygroup.com/

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SOURCE Sexton Advisory Group