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Emergency Funds: The First Step to Financial Health

From layoffs to lockdowns, recent events have forced many Mainers to dig deep to make ends meet. Having an emergency fund can make all the difference during a crisis, and Machias Savings Bank is taking an innovative new approach to emergency savings.

As Maine slowly begins to reopen businesses and people return to work, everyone is more mindful of how quickly and unexpectedly circumstances can change. The Relationship Bankers at Machias Savings Bank are fielding many questions about how our employees and our customers can better prepare for other unexpected interruptions in their income in the future.

“We started thinking about how we could encourage our employees and customers to prepare for unexpected financial setbacks long before COVID-19,” explains Annette Lease, CTFA, SVP Financial Planning. “A study a few years ago revealed that 70% of households in America do not have $400 on hand in case of emergency. Another 60% had no family to lend them money or a line of credit they could access. We know quick access to cash is absolutely critical in a crisis and we asked ourselves how we could encourage more people to open and build up an emergency fund big enough to see them through tough times.”


An emergency fund is enough money set aside to cover three to six months of your current household expenses.

Take a look at your family budget and list all the money you spend each month on the absolute essentials of daily life. These may include:

  • rent or your mortgage payments
  • utility payments, like electricity, water, phone, and internet
  • car payments
  • insurance premiums
  • groceries
  • gas or public transportation expenses
  • credit card, student loan, tuition, medical, or other personal debt payments
  • tax payments

“If your paychecks stopped and no money was coming in, how much money would it take for your family to survive for three months, or six months?” Annette asks. “We saw large numbers of families face this situation during the government furlough in 2018 and during the coronavirus lockdowns. But most families find themselves facing an abrupt loss of income alone—from an unexpected job loss, a medical emergency, or an accident.”


Emergency funds are often confused with rainy day funds, but they are very different, and an emergency fund should always be a higher priority for Maine families. “A rainy-day fund is money you set aside to maintain large assets—like car repairs, or a new roof on your home, or braces for your child,” explains Annette. “In a true crisis, you could probably postpone any or all such expenses. An emergency fund covers the things you and your family can’t live without, like food and shelter.”

When you are living paycheck to paycheck like so many Maine families, the idea of saving up enough money to cover your household expenses for six months might seem impossible at first. Machias Savings Bank has developed exciting new ways to help people achieve a new level of financial security, starting with our own employees.

Would you like help determining how much money your family should set aside in an emergency fund? Our relationship bankers are always ready to review your finances, suggest achievable goals, and help you get there.


On July 3, Machias Savings Bank employees will have a new financial tool to help them achieve peace of mind—the My MSB Emergency Fund. Our financial experts built this savings account to break down many of the barriers that prevent hardworking Mainers from getting ahead and giving themselves a cushion against hard times.

+ Focus on that first $400

“That 3-6-month cushion can seem like too much to save up at first,” Annette acknowledges. “Achieving a smaller interim goal gives you a boost to keep going—and can keep you and your family going during a crisis. The My MSB Emergency Fund offers a higher interest rate on the first $400 you save. We want all of our employees to be able to have at least that much cash available to them at all times and the extra interest will get them there faster.”

+ Real rewards for meeting goals

It feels great to achieve a financial goal—and that feeling can help you keep going. To give employees an even bigger boost, the My MSB Emergency Fund gives every employee who reaches that $400 goal an additional $100—free. “You don’t just save $400, you save $500!” Annette says. “It’s a real incentive to get there.”

+ Decide how much you can save each paycheck—and deduct it automatically

The amount needed to reach an emergency fund goal differs from family to family, so the amount needed to save from each paycheck to do it does as well. Our financial advisors work with all employees to determine the right number for their household—and a reasonable amount of money they can spare from each paycheck to reach it.

“These are hard decisions,” Annette says. “None of us have the willpower to make that sacrifice every week, or two weeks, no matter how much we believe in the importance of an emergency fund. The needs we have right now will always feel more important than the needs we may have later! When you deduct your emergency fund savings from your paycheck automatically you don’t need any self-control to reach your goal.”

+ Make it harder to access your emergency fund

During lean times, it can be hard to differentiate rainy day needs from true emergencies. And as the money in your emergency fund grows, the pressure to spend it can, too. The My MSB Emergency Fund cannot be associated with a debit card, does not allow internal transfers online, and can only be accessed in person at the bank. By making it a little bit harder to take money out, the fund encourages you to keep putting money in.

“In a true emergency, you would have no problem talking to a teller to take out your money,” Annette explains. “But if you are just giving in to a momentary temptation, the extra steps required to access your emergency funds can help you think twice before making a decision you might regret. Is this a real emergency? Do I really need to make this purchase right now? Given the chance to reflect on purchase, most of us will make the right choice.”

+ Plan ahead to get ahead

Another wonderful feature of the My MSB Emergency Fund is that employees can opt to save not just from their paychecks but from daily purchases and other sources, like IRS tax refunds. By choosing ahead of time to round up their purchases, round down their direct deposits, and put the excess into their emergency fund or allocating part or all of their tax refund to emergency savings, it takes a lot less willpower to power through.

While many of these features are only available to Machias Savings Bank employees, our other savings accounts do feature some of the same encouragements and controls. If you have been inspired to improve your family’s or friend’s financial security, we have many ways to help.


As a customer of Machias Savings Bank, the focus is on you. We will enhance your banking relationship by working with you to discover your banking needs. We will be there when you need us.


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Routing Number: 211274531
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NMLS Number: 469539

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