By Mark Foster
Recently Bankrate.com released a staggering statistic stating, “66 million U.S. adults have no savings.” Let that sink in for a minute. That’s the same number as the population of California and Texas put together! That’s a lot of people living paycheck-to-paycheck, and living on the edge of a financial cliff. It can be easy to put off the task of building your savings account, however the reality is not preparing for if you have a financial emergency, but when you have a financial emergency.
Not having an emergency savings account is like not having brakes on your vehicle. You might drive around fine for a little while, but eventually you will need to use those brakes. We all will eventually have an emergency which will require us to use money we’ve saved up. Otherwise, you could be forced to overspend or take out a loan, which could ultimately risk increasing your financial instability.
Here are some suggestions on how to manage your finances:
- Tracking your spending for one month is a good way to see where your money is going. This allows you to better manage your budget, and see where you might want to cut back on spending.
- Create and follow a budget. Motivation to stick with a budget is key in order to successfully build an emergency fund.
- Pay yourself first. Setting up automatic deposits that take a percentage of each paycheck, and places the allotted amount into your savings account is an easy and effective way to save.
- Talk to a financial counselor at CCOA or other NFCC certified credit counseling agency. A personal finance professional will help you create a budget and take a look at your entire financial picture, providing feedback on your situation and establishing a plan of action.
Not only will saving make you more financially stable, it’ll also give you peace of mind knowing you’re financially secure.