Save for Emergencies
Building an emergency fund is the top goal of American Savers. Nearly a quarter of savers who have pledged to save locally or nationally have chosen “emergency savings” as their first wealth-building goal. An emergency savings fund consists of a small amount of money, usually in a savings account, that you do not have easy access to. Saving for this fund starts with small, simple, regularly scheduled contributions that build up over time.
Emergency expenditures can range from the bill for an unexpected car repair to living expenses that are tough to cover because of a layoff. According to a Federal Reserve Board survey, the typical low- and middle-income household says it desires $3,000 in "precautionary savings." However, an emergency fund of as little as $500 can make a difference. One research report showed that low-income families with at least $500 in an emergency fund were better off financially than moderate-income families with less than this amount.
How do you find money to save for emergencies? There are many places to find money to save. Try to deposit money saved by cutting back on small, unnecessary expenditures. Need help? Here are more than 50 ideas for reducing spending. These ideas range from packing a lunch, to switching from daily lattes to daily coffees, to not bouncing checks.