Do you have enough money in your emergency fund?
The figures are alarming. Half of us don't have enough money saved to cover living expenses for three months, according to a recent survey done by bankrate.com. Another 28 percent have no emergency savings at all!
Why is an emergency fund so important?
"It gives you a little pile of money that you can draw on for those little setbacks that we all have in every life and that prevents you from having to put it on your credit cards and paying interest on it," says Liz Weston, author of the book "Deal with Your Debt" says look for little ways to save.
"People think that they have to save up three months' worth of expenses right away and the reality is that can take years even to get that sum put together. So don't put that high a goal. Start with something simpler. Start with $500 or $1,000."
Liz suggests opening a separate account for your emergency fund in order to reduce the temptation to tap into it.
If you're trying to cut expenses, Weston advises looking at what you spend for food.
"Most people spend more than they need to there. And if it's still hard for you to cut back, look at some of the luxuries you've got. Everybody loves their pay TV, but there are a lot of people who have cut the cord and that could save you significant money every month that you could be putting into an emergency fund."
For more information
Start an Emergency Fund to Prepare for Financial Emergencies
Why is an emergency fund so important?
"It gives you a little pile of money that you can draw on for those little setbacks that we all have in every life and that prevents you from having to put it on your credit cards and paying interest on it," says Liz Weston, author of the book "Deal with Your Debt" says look for little ways to save.
"People think that they have to save up three months' worth of expenses right away and the reality is that can take years even to get that sum put together. So don't put that high a goal. Start with something simpler. Start with $500 or $1,000."
Liz suggests opening a separate account for your emergency fund in order to reduce the temptation to tap into it.
If you're trying to cut expenses, Weston advises looking at what you spend for food.
"Most people spend more than they need to there. And if it's still hard for you to cut back, look at some of the luxuries you've got. Everybody loves their pay TV, but there are a lot of people who have cut the cord and that could save you significant money every month that you could be putting into an emergency fund."
For more information
Start an Emergency Fund to Prepare for Financial Emergencies
How am I supposed to save any money when I'm busy paying for benefits for illegal aliens??? I mean,,, Â I'm supposed to pay for their welfare and now college,, Â I'm liven on the edge so these people can reap the rewards of the good ole USA at my expense. I'm really cutting back on as much as I can but I can't seem to get ahead. My credit card balances are zero,, Â I don't drive anywhere because of fuel costs,, I'm living on a very small retirement and I pay my taxes,, Â but I can't get ahead. I'm thinking about going to Mexico,,, sneak back into the USA and apply for benefits and live the high life with free college tuition.
The problem with the advice given by these people is that one size doesn't fit all. In some cases such as yourself where you've cut as much as you can the best you can hope for is that prices stabilize and taxes don't keep increasing. Lots of people out there are being pushed over the edge through no fault of their own.
The amount of consumer debt that Americans hold is shocking. These are the same people complaining about government spending day in and day out.Â
NO!
Herb, good advice, however it will most likely fall on deaf ears. America's unsecured credit card debt only continues to skyrocket and people don't care about savings.
Those who are responsible and live below their means and save up money are taxed increasingly by the government, while those that don't care and don't try are given free handouts in the form of welfare, EBT cards and other freebies from the government.
Did you know that you can't qualify for certain types of public assistance if you have a bank account with more than a certain amount in it?Â
Where is the incentive for people to be responsible and save up money for an emergency fund if its easier for them to mooch off the government and hard working tax payers?Â
@NW-Economist Have you ever lived on welfare? You really think they have it easy? I've never been on welfare, but did get food stamps for a while (while working for a very low wage). It did make my life easier to know that I would always be able to feed my child. It did not ease my constant anxiety about how I'd come up with my rent money or what to do when faced with shutoff notices for both the electricity and the phone. I guess you could say I was living beyond my means, but I didn't have a choice - I was in the cheapest apartment I could find and my fixed expenses were still less than my income. I purchased almost nothing other than food during that time. Many minimum wage workers are in this situation. The maximum amount of cash you can have to qualify for most public assistance is $2,000, which is really hard to come up with if you're so poor that you would otherwise qualify for public assistance!
If I had received cash welfare, I would have been far worse off because that would have provided even less income than my job did. I just can't understand why so many people think that those on welfare are living high on the hog without a care in the world. It is so difficult and painful to live this way - always feeling like you could end up on the street. I've worked at many difficult and stressful jobs, but none of them were nearly as hard as living in poverty.Â
@merline @NW-EconomistThe sad thing is that you're right, but also wrong. Living on welfare is a meager, hand-to-mouth existence, however, as the statistics and growth of these programs explode, people prefer it to working, even when offered jobs or non-governmental assistance.Â
Schools in the puget sound are starting to offer 3 meals a day and free medical care to ANYONE who walks in off the street. Police have observed some of these people doing drugs nearby, you understand that since they don't have to buy food anymore they are trading their EBT cards for drugs or cashing their welfare checks on stupid stuff.Â