MANHATTAN, Kan. -- Saving for a specific purpose -- a home, a more dependable car, education or vacation -- might seem challenge enough, yet a Kansas State University financial management specialist recommends building an emergency fund first.
"Having money in the bank to pay unexpected expenses is a must," said Carol Young, K-State Research and Extension financial management specialist.
An accident, injury or illness can happen at any time, said Young, who noted that stress from unexpected events typically increases when there isn't money available to cover the added costs.
Given the current economy, the possibility of a job loss or layoff is another incentive to save, said Young, who noted that money managers recommend building an emergency fund aiming to cover at least six months of living expenses.
If not in the habit of saving, however, the K-State specialist encourages saving the equivalent of one month's expenses as an initial goal:
* Start saving and save regularly.
* Pay yourself first. Deposit $10, $20 or more from each paycheck in an interest-bearing account.
* If available, choose direct deposit to make sure savings are placed in the intended account.
* Save all, or at least part of, a raise, bonus, or tax refund.
* Shop with coupons for needed items and add money saved to a savings account. A $10 per week savings 52 weeks a year will add up to $520 plus interest.
* Weigh needs versus wants, and earmark funds to meet needs first.
* Save to pay cash or use layaway, rather than add to a credit card balance during an emergency.
"Make savings a habit to meet financial needs now and in the future," said Young, who noted that more information on basic money management, including saving and spending tips is available at local K-State Research and Extension offices and online at: www.ksre.ksu.edu and at www.ksre.ksu.edu/financialmanagement/ and www.kansassaves.org. Examples include "Basic Money Management" [S134G] and "How are you doing? A Financial Checkup" [MF2721].
K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.
Story by: Nancy Petersonnancyp@ksu.eduK-State Research & Extension News
Carol Young is at 785-532-1943.