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Consumer Watch: Legit reasons to dip into your savings

Holding on to some of your money will help keep you out of debt in case of an emergency. There are only a few reasons when you should be using your emergency savings cushion (KOKH).

Most Americans don't have enough money saved to cover a thousand dollar emergency, according to a 2018 Bankrate survey. Many saying they would need to carry on more debt to pay the bill. There is a number most personal finance specialists say you should have set aside for emergencies, but there are some variations based on what you earn.

A health emergency savings will be three to six months expenses, and that can mean different things depending on your income. Keeping a detailed budget can help you get the exact answer.

That amount of savings can sound daunting, but a good starting emergency fund means getting one thousand dollars saved as quickly as you can. This first amount of savings will help you with most unexpected car repairs or a last minute plane ticket if you have a family emergency.

A healthy emergency fund will take significantly more time. Let's say you have a combined take home family income of 75,000 dollars. That means building toward keeping between 9,000 and 19,000 dollars in savings. The least overwhelming way to do that is to save 10-percent of your paycheck every time you get paid. If you do this, it will take between a year and two years to build that cushion.

Avoid dipping into these savings for things like vacations or non-emergency remodeling of your home. The money can be used, but only to pay bills if you've lost your job, unexpected car trouble, urgent unexpected health problems, or to recover if you and your home have been affected by a weather emergency like a tornado.

Some people pool all their savings into one account, but it could be easier to keep track of money that is meant for different goals if you have more than one account. That could mean a savings account for an emergency fund and a different one for things like travel.

Building a budget is the fastest way to figure out how much you can afford to save. It can take a couple of months to get used to living using a budget, but once you get over the hump, it will get easier and proper spending habits will come second nature.

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