Create an emergency fund. Financial counselors are very clear on this point. They want us all to have at least several hundred dollars socked away to deal with unexpected needs.
In fact, many counselors believe the fund should have more than a few hundred dollars. Some say it should be big enough to cover your living expenses for six months.
Of course, when you are in need of debt relief, creating a fund of that size is easier said than done. Indeed, it might make more sense to seriously consider a bankruptcy filing.
Keep in mind, if you are in this position, that you are hardly alone. Many other people struggle to find the money to deal with emergencies. Indeed, according to a recent survey, nearly half of Americans lack the funds to respond to unexpected bills. And 28 percent of Americans – more than 1 in 4 – have no emergency savings at all.
The survey was conducted by Bankrate.com, as part of its Financial Security Index.
Only 25 percent of Americans have enough money saved to cover six months of living expenses, the survey found.
Understandably, people with higher incomes tend to have more saved. Among those with annual income of over $75,000, only 9 percent – fewer than 1 in 10 -lack emergency savings. But 52 percent – over half – of those with yearly incomes of under $30,000 have such savings.
The sluggish economy of recent years has done little to help people get better traction on their debts. Instead, lengthy bouts of unemployment have depleted many people’s savings.
In short, if you’d like to save more but are having a hard time doing that, you’ve got plenty of company.
Source: “Survey: No More Than 25% of Americans Have No Emergency Savings,” Moneynews, Nancy Stanley, 6-25-12