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🤔How to build an Emergency Fund?

Use these tips to set up an emergency fund.

1️⃣ Open a savings account.
It’s important that you choose the right type of account to build your emergency fund. It should be easy to access your money quickly in case of an emergency.

Here’s what you should look for in a savings account:

🔹the account should be separate from the account you use for day-to-day transactions.
🔹you pay no or low transaction fees
you can make withdrawals without penalty.
🔹you earn interest on the money you save.

2️⃣ Start by saving a realistic amount.
It can take months, or even years, to reach the desired amount for your emergency savings. Don’t panic, this is normal!

It’s better to start with a small amount so that you don’t become discouraged.
Start by figuring out what you can put aside every week. Whether it’s $50, $20, $5 or some small change, the important thing is to start right now.

In general, it’s recommended that you save the equivalent of 3 to 6 months of your regular expenses. You can also aim to save 3 to 6 months of income. Both methods are effective, so choose whichever one works for you.

These amounts can sometimes seem out of reach. That is why you should save gradually. Saving a small amount on a regular basis can make a big difference in the long term.

3️⃣ Make it a habit.

4️⃣ Automate your savings.
🟢Tip: set up your automatic transfer on the days you get paid so that the amount saved is transferred as soon as your paycheque is deposited into your account.

5️⃣ Eliminate an expense and save the amount.

Want to learn how to eliminate few expenses? Follow us to find out more⬆️

Building wealth: Ages 13-15

Introduce the following financial concepts to reinforce your teen’s independence, and help them find a financial identity outside of your watch:

🔹Work
🔸Banking
🔹Investing (bonds vs. stocks)
🔸Work

Your child has a concrete understanding that money comes from hard work, but until this point, they’ve only earned money through chores, while their parents are watching over them. Finding a job separate from parental control reinforces a sense of responsibility in teens, and it looks great on a college application.

Teens don’t necessarily have to work on their feet: Freelancing sites like Fiverr will allow teens to join at 13 years old, although sometimes parental consent is necessary.

Once your teen has some money of his or her own, it’s time to open their first bank account (if you haven’t already).

🔺Banking
Contrary to common belief, banks aren’t going anywhere anytime soon. 84% of bank customers ages 18-34, including millennials, have visited a teller at least once in 2016. Even if banking ultimately becomes a purely digital experience, it’s essential to understand exactly who is keeping your money safe.

You may have brought your child with you to the bank before, and now’s the time for them to open a separate (but monitored) account for their savings. Many banks have accounts exclusively tailored to kids, and as we’ve reported, a good bank account for kids should meet the following criteria:

▫️No minimum balance requirement
▫️No monthly maintenance fees
▫️Online account management
▫️A high interest rate for savings (the best offer 1% or more!)
When choosing your bank, consider opting for one with a local branch so you and your child can visit and ask questions if need be.

🔺Investing
At this point, your children understand how to earn and save money, budget for the future, and keep their savings safe in a bank. Now it’s time to teach them a little risk. Keep the lessons simple. People have two options if they want to invest their money – bonds and stocks.

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Why don't schools teach financial literacy?
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89% of K-12 teachers believe that, to graduate high school, students should take a financial education course and pass a test to show competency in the subject. Theoretically, this makes sense; if students cannot show they are ready to be financially independent, how can they safely transition into adulthood, where financial decisions are to be made completely on their own? However, this expectation does not match our reality; barely any financial literacy classes are being offered in high schools, not to mention the absolute lack of course material and resources in middle schools and elementary schools.
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🔺Read our blog post to learn more
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