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Expect the Unexpected: Set Up Automatic Savings Today

Grow your assets and prepare for the unexpected

Work. Earn. Save. It's a simple process, isn't it? But despite knowing that saving is important and that it should be a priority, consistently putting money aside for savings is a challenge for most people. You set out with all the best intentions, but as expenses pile up for housing, groceries, transportation, and the occasional indulgence, saving gets pushed aside. That is, until the unexpected happens and there is a sudden need for funds that aren't there.

The very definition of an emergency demands that it is unexpected, but what is known is that emergencies will happen. And when they do, savings will most certainly be at the top of your list of priorities.

Unfortunately, that doesn't resolve that you've got a lot of other concerns to focus on in the present without worrying about possible emergencies. What's the solution? Automation.

The case for automatic savings plans.

With an automatic savings plan, you can put your savings strategy on autopilot and feel secure knowing you have a safety net for any unexpected situations. Decide what amount of money you're comfortable setting aside regularly after factoring in your typical bills and living expenses. Then arrange to have it regularly transferred to a separate savings product, like CIT Bank's Money Market account, at a cadence that works for your budget.

Besides being a convenient way to run your finances, a major reason to automate your savings is to build up a rainy day fund. Rainy day funds are cash savings that you plan to use exclusively for handling financial emergencies, big or small. The goal is to store up enough money for any unplanned expenses, whether that means car repairs or living expenses after losing a job. A healthy rainy day fund should contain enough money to cover your primary expenses for at least three months without additional funds from other sources.

Setting Up a Rainy-Day Fund

Begin working on your rainy day fund by creating three lists of expense types:

  1. Bare necessities
  2. Regular (but infrequent) charges
  3. Unexpected expenses

Having a better understanding of the expenses you need to save for will help you plan your savings more appropriately. For more help, use our emergency savings calculator.

Next, you'll need to choose your method of saving automatically.

  1. Payroll deductions – To arrange automatic transfers from your paycheck to your savings account, work with a representative from your employer's HR department. Have your account number and your bank's routing number handy. Be sure to also connect with your financial institution to clarify your bank's policies around additional contributions for certain account types and to ask whether you'll be charged a fee.
  2. Checking-to-savings transfers – An alternative option is to schedule regularly recurring transfers from your checking account to your savings account, which can be held at the same or another institution. These automatic transfers can typically be set up online. If not, contact the financial institution where you have your checking account and provide customer service with your account number and the routing number of your savings bank.

Ensure Easy Access to Your Savings

In the event of an emergency, you'll need access to your rainy day savings as soon as possible. For that reason, you should have those funds in an account that offers quick and convenient withdrawals, like a savings or Money Market account. Keep your rainy day money separate from the money in your other accounts so that you never have to worry about lacking funds when you need them most.

Start Preparing Today

Putting your savings on autopilot makes preparing for unexpected expenses simple and stress-free. Saving automatically may already be part of your financial strategy through regular contributions to a 401(k) plan or other retirement program, so why not apply the strategy to your everyday savings?

Don't choose between growing your assets and keeping up with current expenses. Get started with CIT Bank today to take advantage of interest that is compounded daily, and maximize your earning potential.

From a job loss to medical expenses, learn more about emergency savings and how you can be better prepared financially for the unexpected.

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