Emergencies are a fact of life. A lot of things in life arenâ€™t planned â€“ a flat tire, an emergency room visit, or a broken air-conditioner, for example. The question isnâ€™t whether an emergency will pop up, but whether someone is prepared for it or not. Many people are not financially ready for an emergency. In fact, 39 percent of American adults have no savings to cope with a financial emergency. Almost 60 percent of adults age 45 and under have less than $500 saved to deal with any emergencies.
Arkansans are struggling with personal finances. A CCOA website poll found 67 percent of participants state that they have absolutely nothing saved to deal with emergencies. Nothing. These people are living on the edge of financial disaster.
Families who have little or nothing saved for an emergency will face an even bigger emergency when they donâ€™t have the savings to pay for that ruined tire, hospital bill, or broken appliance. That is a very stressful way to live, without any security.
For some security and peace of mind, people need to create an emergency fund which will be a helpful safety net if they encounter a problem. Non-profit CCOA recommends:
- Open a savings account if you havenâ€™t already.
- Regularly deposit money into your account.
- Automatic deposit is the best and easiest way to save.
- Set a specific goal, such as $750, and write it down.
- Post your emergency fund goal where you will see it so it will be an ongoing reminder for you to save.
Having a savings safety net will go a long way to cover the financial emergencies that will eventually happen.
Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. To schedule an appointment with a Certified Consumer Credit Counselor contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.