It could be an accident or a health issuewith your fund you have room to breathe.

The key, however, is to leave the fund alone until you need it.

This post originally appeared onMy Bank Tracker.

Short-Term Methods for Building an Emergency Fund

In the short-term, take small steps.

Start by setting a reasonable goal.

Plan to have an emergency fund of, say, $300 to $500.

With the goal set, the next step is to plot the moves to accomplish it.

That becomes your overall goal.

Make it a challenging, but not unreachable, number.

There are plenty of ways to come up with extra money throughout the month.

If you have online banking, it’s pretty easy.

Set up an automatic plan to transfer $50 a week into savings, and then forget about it.

You could even set up automatic deposit of your paychecks each month with a predetermined amount set for savings.

Take a look at which banks offer thehighest interest rates.

Then it’s time to set another, higher goal maybe an emergency fund of $1,000.

Keep your automatic savings plan in place, but increase the amount.

Once you reachthatgoal, aim for a single month’s worth of living expenses.

And just keep watching that emergency fund grow.

When you do have an emergency, the funds are there for you.

Use them instead of putting an emergency repair or other unexpected bill on your credit card.

Retirement Savings

Alongside your emergency fund, let your long-term savings accumulate and grow.

In mostretirement savings plans, investments are managed through the provider.

Remember, the more income you save now, the less income you’ll have to replace after retirement.

The best way to confirm your savings grows is controlling debt.

And your prime target should be credit card debt, because it’s the most expensive.

Pay down credit accounts and aim at maintaining a maximum 30 percent credit utilization ratio.

In other words, keep your card balances at 30 percent of the total credit limit.

Your emergency fund shouldn’t be touched until you actually need it.

Thanks to your planning ahead, life will have some financial stability.