Saving for Unexpected Expenses
A new study from Bankrate shows that the majority of Americans lack the funds to deal with an everyday life emergency.
Specifically, the study found that nearly six in 10 Americans don’t have enough savings to pay for a $500 car repair or a $1,000 medical bill.
As Jill Cornfield, Bankrate.com analyst points out, “It’s not a matter of if, but when an unexpected expense will pop up.”
Cornfield adds that the survey shows that just under half of adults surveyed said they or a family member had a major expense in the past 12 months.
Just look at the numbers: these are not crazy, rare emergencies we’re talking about here. In fact, $1k in medical bills or a $500 auto repair qualify as downright reasonable, considering what these types of emergencies typically cost these days, ($2,500 transmission, anyone?).
Are we just going to throw our hands up in helplessness, or are we going to do something to prepare?
We recommend putting away 10% of each paycheck to save for a rainy day. This proactive habit can produce big gains over time and will help you be prepared for an emergency.
Click here to use our savings calculator to see how much you can save up!