April 22, 2021
Those of you who tune into the Women & Money Podcast know, I now recommend aiming to have an emergency savings fund that can cover up to 12 months of living costs.
But I keep hearing grumbling that keeping so much money in a savings account right now is such a lousy investment, because it’s near impossible to earn more than 1% interest.
You are right, that is a lousy investment! But an emergency savings fund is not an investment. It is security. It is peace of mind. It is protection.
Sure, I am just as frustrated as you are that safe savings rates are so low right now, and the Federal Reserve is signaling they may stay low for at least another year or so. But I would rather be frustrated than lack the peace of mind that my family will be okay no matter what comes our way.
And right now you may have a chance to boost your savings. For starters, if you qualified for the latest $1,400 per person stimulus check and you don’t need it to cover household essentials, I sure hope you consider using at least some of it to add to your emergency savings account, if you’re not yet at my 1-year target.
Same goes with any tax refund that will be coming your way in the next few months. Again, if you don’t need that money to help cover your family’s basic necessities, now is the time to commit that you will use some of the money to build your emergency savings. And I do mean commit. Research has shown that when we write a commitment letter (and sign it!) we are more likely to follow through when the time comes. An added nudge is to let someone else know what you intend to do and ask them to check in on you. A “commitment buddy” helps us convert good intentions into smart actions.
And I am thrilled to tell you that my Ultimate Opportunity Savings account offer with Alliant Credit Union has been extended through the end of the year. Anyone is eligible to apply for Alliant membership, and then sign up for an Ultimate Opportunity Savings Account. If you make 12 consecutive monthly deposits of at least $100 and have a balance of at least $1200 after a year, Alliant will give you $100 more in your account. That is a seriously great deal. Alliant is paying you to save! To be eligible for the $100 bonus you must sign up through the myalliant.com website, where you will see a photo of me greeting you.