Financial emergencies can happen to anyone at any time. Your car could break down, burst a whistle in your house or you could be in the hospital with a seemingly endless series of bills. That's why it's so important to save in an emergency. Yet, 54% of Americans are not prepared for financial emergencies, as noted by KeyBanks Financial Wellness Review, with data from over 35,000 adults in the US.
How much should we all have savings accounts for emergencies? Ideally, enough money to cover at least three months of essential expenses, and ideally enough to pay six months of the necessary bills. Yet, more than half of Americans do not have enough money to cover an emergency at this level. If you're one of them, you have to work on making cash reserves ̵
Increase Your Savings
If your savings are not particularly healthy, you must give priority to your emergency fund. Otherwise, you could use some serious credit card funds to keep up with unplanned expenses that will not be long in coming.
First, create a budget that sets your current spend. See which ones will cause you to neglect your savings and work to reduce them. For example, if your rent costs $ 1,400 a month, but your building is packed with amenities, try to use a smaller area with fewer benefits. A step that pays off if you save $ 400 per month. If you frequently eat out or order something to eat three nights a week, you are obligated to prepare at least half of these meals at home. By doing so, you can save a lot of money, and that's money that can go into your emergency fund. An estimated 45% of Americans today have a sideline and if you're ready to save time, you can save money without having to cut that much.
The best part is that this sideline can be just about anything you want. If you are ready to wait in a local restaurant for a table or to do a retail sale on weekends, then do it. Otherwise, you will be creative. Transform a hobby you like into a business, be it baking, jewelry making or photography. The more flexible your sideline, the easier it will be for you to sustain it – and the less you will be able to tolerate those extra hours of work.
You need emergency savings to tackle the unknown life costs. If you're one of more than half of Americans who do not have enough cash reserves, it's time to do better. Otherwise, you risk damaging your finances the next time a big bill pops up and you can no longer pay.