If an unexpected emergency arose today, do you have funds available to pay for it? If you say no, then you are not alone. In an article posted on Forbes.com on May 24, 2018, it stated that approximately 40% of Americans cannot pay for a $400 emergency expense. When you think of it, $400 is not a lot of money, but that’s the reality. Another article on Bankrate.com stated that approximately 23% of Americans have NO emergency fund at all.
To take control of your financial situation, it is important that you establish an emergency fund if you don’t have one already. For some reason, emergencies tend to occur more frequently when you have no money to cover them. Small amounts saved accumulate over time. Don’t think that saving $5 or $10 per paycheck is too small, it is a start. Increase your funding once you have the means to do so.
It is recommended to have 3-6 months of funds saved to cover your expenses. This may seem like a challenging goal for someone who is financially struggling. My advice would be to start with a smaller goal, for example, try to save up 1 week worth of funds, then keep saving until you have up to 2 weeks, and continue in 1 week increments, until you can save up for a full 3-6 months. Please note that the money that is saved in your emergency fund, should only be used for true emergencies.
You can use a high yield interest account to save your emergency fund. You can utilize MagnifyMoney comparison tool to see the best interest rates for savings account. It’s time to be empowered and be in control of your financial situation.
Please like, share, and comment below if you have any questions!