By Kalah Mingo
Elizabeth Medlock, a third-year linguistics major at the University of Georgia, walked to her car in her parking deck in Downtown Athens, Ga. She had a yoga class to attend, however, something was wrong. Her car was not in her assigned parking spot. She almost started to panic, but remembered she parked in a “future residents” spot closer to her apartment the night before.
Unfortunately, she forgot to move it and her car had been towed. It would cost $150 to get it back.
“I was stuck and I didn’t know what to do at first,” Medlock recalled.
The towing company would charge $50 a night if she wasn’t able to pick it up.
“Thankfully I had money in my savings,” Medlock said. “If I didn’t have that in my savings account I wouldn’t have been able to get my car that day and it just would’ve kept building up.”
Emergency savings isn’t always a top priority for college students. Ann Woodyard, assistant professor at UGA’s College of Family and Consumer Sciences, is an expert in financial planning and has been a certified financial planner since 2003.
Though emergency savings is not always a great concern for college students, Woodyard advises them to think about the things that can go wrong like car troubles, health issues and unexpected living expenses.
“If you have cash on hand and you know you can cover that expense, you’re much better off,” Woodyard said.
Depending on how independent a student is, Woodyard recommends starting with $500 in savings to be prepared for emergency situations.
“You can’t control what other people do, but if you have that cushion you know you’re not going to stress over paying an expense,” Woodyard said. “You’re not going to have to max out your cards and live on ramen for three months.”
Medlock started saving when she was 16 years old. “I try to put half of every paycheck I make into savings,” she said. “Now that I’m 20 I have a solid amount of money in there that I feel comfortable with, especially for emergency situations.”
Medlock credits her savings to budgeting, something her father instilled in her when she was young, and now she’s glad she’s taken his advice.
“Even though you say ‘I’ll never need this money; nothing’s going to happen to me,’ you might be in a situation like where your car gets towed and you’ll be really thankful that you had that money instead of panicking and not knowing what to do,” Medlock said.
For those college students who are unsure of how to start and maintain an emergency savings fund, Woodyard recommends starting small by looking at one’s income and expenses.
“Once you really see what you’re spending sometimes it’s easier to see places where you can cut back and find the money that you can put into a savings account,” Woodyard said.
She also urges those with a direct deposit to have their bank automatically withdraw an amount from their paycheck to put into savings.
“A lot of times if you don’t see it in your balance, then you’re not going to spend it,” Woodyard said. “It’s kind of like hiding money from yourself.”
Whether you’re a financial novice or an experienced budgeting master, emergencies happen and it’s important to be prepared because no one ever thinks it will happen to them until it does.