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A big unexpected expense like a doctor bill or car repair can put the squeeze on your budget. But if you’ve built up an emergency fund, then you’ve got these surprise bills covered.

You need an emergency fund. Here’s how to get started.

It happens to all of us eventually. A big expense that needs to be paid right now. Maybe your car or truck needs a new transmission, which can cost from $3,000 to $7,000. Need a root canal? That can cost $1,000 per tooth. If you don’t have the cash to pay these bills, you might consider paying with a credit card. But if you need to pay off that bill over time, you could end up paying a good deal in interest. This is where an emergency fund can be a big help.

What is an emergency fund?

An emergency fund is a bank account where you save up money to cover large, unexpected expenses. It takes a while to build up your emergency fund, so it’s smart to get started today. Although financial experts recommend saving three to six months’ salary, so you have money in case you lose your job or get injured and can’t work, any amount you’re able to save can help make paying unexpected bills easier.

Start saving

To start building your emergency fund, follow these steps:

  1. Open a savings or checking account that’s separate from the ones you usually use. This keeps your emergency fund dollars separate from the money you spend day to day.
  2. Set up automatic deductions from your paycheck that are deposited into your emergency fund account. Even if you only deduct $10 per weekly check, you’ll have saved $520 in a year. If you don’t have the choice of automatic deductions, take $10 out of your paycheck and immediately deposit it into your emergency fund.
  3. Put your tax refund or bonus to work. If you get a tax refund or bonus, put at least half of the money into your emergency savings. According to the IRS, in 2015, the average refund was $3,200. Adding $1,600 to your emergency savings is a quick way to build your financial cushion.
  4. Cut your expenses and put the money you save into your emergency fund. Find a lower cost cell phone or Internet plan and bank the difference. Take the money you spend every week on take out and put it into your savings account instead. Raise the deductible on your car insurance and put away the money you save.
  5. Keep the change. All the quarters and nickels weighing down your pocket can add up to hundreds of dollars over the year. Collect them and put them into your savings. Another idea is to round up the cost of every purchase you make and put the difference into your savings. For example, if you spend $47.35, put $2.65 into savings. Some banks offer programs that do this automatically when you use your debit card.
  6. Pay yourself. When you pay off a debt like a loan or credit card bill, take the amount you were paying each month and deposit it into your savings.

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