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Natalia Lusinski
June 25, 2016 2:23 pm

If you don’t have emergency savings, you’re not alone. Over a quarter of Americans (!) don’t have emergency savings, according to Bankrate’s June Financial Security Index. Here were the results of the poll:

– 28% of Americans — about 66 million people — have no emergency savings
– 18% had some savings, i.e., to cover less than three months of expenses
– 16% could cover three to five months of expenses
– 28% could cover six or more months of expenses
– 9% either refused to answer or did not know

The research also found that college graduates tended to “have an adequate amount of emergency savings,” The Motley Fool reported, versus high school graduates. In addition, people who earned at least $75,000 per year were more prepared for an emergency than people who earned less than $49,999 a year.

However, many college graduates still didn’t have enough in emergency savings — 55 percent of them. Plus, among people earning over $75,000, about half, 51 percent, did not have at least six months in emergency savings.

Various reasons are cited for Americans’ lack of setting aside money for emergencies, namely that:

– Students are not learning about money and saving in school
– People acquire and have too much debt
– A “spend now, save later” attitude

So, what does all this mean for us? Start saving. I know, it’s tough. Don’t be part of the no-emergency-fund statistics. Whether you make a budget (and stick to it), use cash for purchases from now on instead of plastic, or think of purchases in terms of the number of hours you need to work to fund something (like those new shoes), there is a way to set aside money into an emergency fund.

How To Create An Emergency Fund (Even If You Think You Can’t)

Many financial advisors suggest having six months’ worth of expenses set aside for an emergency (i.e., job loss), while financial guru Suze Orman suggests eight months. “I know that’s a lot, but I want you and your loved ones to be okay if you were ever laid off, or sick for an extended period of time,” Orman states on her blog. “Sure, it could take years to reach your eight-month goal. That’s totally okay. The important issue is that you are starting to save today and so every month you will be moving closer to your goal.”

I’m a big fan of Orman’s, who advises that there’s no excuse for not having an emergency fund.

“It makes me so sad to read reports that many households don’t have even $1,000 set aside to cover an unexpected expense,” Orman says on her blog. “What’s so sad is that I know that must cause such stress. If you don’t have an emergency cushion, on some level you’re always worried about what you’ll do if one of life’s ‘what ifs’ strikes.”

She suggests things like opening a savings account and labeling it: “My Emergency Fund” or “My Safety Net,” then having money automatically transferred into it each month. Then, as months go by, try to increase the percentage you transfer, like 10 percent to 20. I recently started doing this — and guess what? It works. By automatically transferring the money, you forget it even happened and then when you look at the balance a few months later, you’re pleasantly surprised. You’ll see.

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