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Having an emergency saving account in place is a good idea for all renters across the nation trying to stick to a monthly budget plan. You never know when something can go wrong and often you will need the money right away. While obtaining insurance for things like contents protection, car coverage and income protection can all help pay for these unexpected injuries and illnesses, there are several other instances where insurance will not help you out. This is why it is best to have an emergency savings account in place.

Emergency savings accounts can be any type of saving account. You might want to choose a saving account that offers a high interest rate but also that allows you instant access when you need money right away. Using a term deposit will not do you any good as you may need to wait up to three years to even get at the money. If something happens before then, you are in the same bout as if you didn't have an emergency savings account in place.

An online savings account is a good choice for emergency funds as you can instantly access the money by transferring it into a normal savings or check fund. However, you will also not be tempted to spend it as you cannot access the money through a general ATM without transferring it first. And, best of all, online savings accounts often come with the highest interest rates out there, especially for accounts where there are no stipulations and no minimum deposit amount.

Money for Emergencies

You can build up your emergency savings account by putting away a little bit of money each month. For example, try putting aside $200 per month for as long as possible. After a year you will have $2400 plus interest which is a good little start to an emergency savings account. As long as nothing goes wrong you may wish to continue to invest this money or you may look at other investments as well.

What should you use the emergency money for? Well, hopefully, for nothing. However, things do go wrong. If one of your children gets injured and insurance won't cover it, then you may need to dip into the funds to pay for the medical bills. If your refrigerator breaks then you might need to buy a new one. However, keep in mind that some of the appliances and other things in your rental home are actually the responsibility of your landlord, not you. Make sure you tell him as soon as something breaks around the house.

Problems in your home are quite common and one of the reasons why many people will need to dip into their emergency savings account. However, if you have renters insurance in place, then a lot of these instances can be avoided. Damage to your contents can be claimed through your insurance so you don't have to spend your emergency money to buy new furniture, new clothes, etc. You might need to use some of the money to pay the deductible but, with the right policy in place, your emergency savings money should be left untouched for the most part.

Emergency savings accounts are designed to keep your finances in control. If you face an emergency and don't have the money hidden away somewhere then you will need to go into debt or borrow the money from someone or somewhere, both of which means that you will need to find a way to pay it back and interrupt your budget. Look into starting an emergency saving account as soon as possible, even if you can only contribute $50 a month - it's better than nothing.

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