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  • Brooklyn Scott

In case of emergency (expenses, that is)

According to a CIBC poll conducted by Harris/Decima,

“Almost half of Canadians say their household has no money set aside for emergencies”

A staggering “… 45 per cent of Canadians do not have an emergency savings fund, meaning an unexpected expense or emergency could have them dipping into RRSPs or taking on debt to get by.” Source:

Unfortunately, unexpected surprises (or expenses) pop up now and then for everyone – in the form of a vehicle repair, appliance replacement, job loss, veterinarian or medical bill (dentist, ambulance, drug costs). Occasionally, that figure can be a big one. If you are living paycheque-to-paycheque that unforeseen expense can put you into a precarious position, but bulking up your emergency savings shouldn’t cause you too much anxiety. Read on to discover some simple changes that you can implement today to create a financial safety net for you or your family.

Save to a separate account.

Setting up a separate “emergency only” savings account – preferably one that earns interest (such as a high-interest savings account) is a good plan. If it takes you one-to-two days to access the funds within that account – even better. With online banking you can even label/nickname the account “EMERGENCY ONLY – DO NOT TOUCH” hopefully this will deter you from spending the money before an unforeseen financial crisis occurs.

Automate your savings

Have the funds set to transfer to your emergency savings the day your paycheque is deposited. The money is gone before you even see it – out of sight, out of mind. Start small – a deposit of $40 a paycheque will amount to $1040 over the course of a year. If that’s not feasible, even $20 a cheque will amount to $520 – it’s important to set achievable goals (not set yourself up for failure) and not get discouraged. Saving just a small amount on a regular basis can make a big difference over the long term.

Set a goal (three to six months of expenses) but be realistic

For some three to six months of expenses is a reasonable goal – but are there two earners in the family, or one? Would the job loss of a higher income earner have a more dramatic effect? Do you know what your fixed expenses are? Is six months a reasonable time frame? All these questions play an important role when establishing your emergency savings.

Put away your tax refund

If you are lucky enough to receive a refund at the end of tax season – funnel it into your emergency savings. If you aren’t depending on that refund to pay off bills or existing debt – put it away – again: out of sight, out of mind.

Top up your Tax-Free Savings Account

If you have built up your emergency savings and have a bit of extra money (go you!) consider topping up your Tax-Free Savings Account – this is a great investment tool for more long-term savings. Because the money and growth in this account are never taxed it is a wonderful vehicle to grow your money over time but is also easily accessible (unlike your RRSP) that if you need to tap into it unexpectedly you shouldn’t incur any taxes or penalties when removing the funds.

Other ideas to increase your emergency fund

Take advantage of every opportunity to increase your savings and make additional deposits to your account if any of the following occur:

  • Get a pay raise/receive a bonus from work

  • Sell something/have a garage sale

  • Receive money as a gift

When you finish paying off a loan (car loan, mortgage, student loan) consider taking the money you were putting towards monthly payments and deposit into your emergency savings account instead.

Finally – before using all or part of your emergency fund, determine whether the expense is a true emergency or something that can be put off until you’ve had the opportunity to save.

However, “When it’s truly an emergency, don’t hesitate to use your emergency fund. It’s much better than costly options such as payday loans or credit card cash advances. The purpose of an emergency fund is to avoid resorting to these expensive options.” Source:

As always, speaking to a Financial Advisor is a great way to help navigate the occasionally stressful task of budgeting and finances. They can assist you in establishing goals and setting up emergency savings plans and investment accounts. An Advisor can help you protect your loved ones in the case of job loss or tragedy with the use of disability, critical illness and life insurance. Reach out and speak to an Advisor today!

Brooklyn Scott is a Financial Advisor/Mutual Funds Representative for Lewis & Jones Group/Desjardins Financial Group/Desjardins Financial Security Investments Inc. in Killarney, Manitoba.

Mutual funds are distributed through Desjardins Financial Security Investments Inc. For insurance products, Desjardins Financial Security Investments Inc. acts as a national insurance brokerage agency.

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