Do you have a fund for emergencies?
Image Source: Flickr User 401(K) 2012
A recent survey by Bankrate showed that most Americans don’t have an emergency fund to cover unexpected expenses—and that includes Garner, North Carolina consumers. Here’s a look at the results of a couple recent surveys on emergency expenses and how you can build your emergency fund.
Bankrate Survey on Unexpected Expenses
Bankrate’s most recent Money Pulse Survey, published in late January 2017, revealed that 60% of Americans had a major unexpected expense in 2016. The most common unexpected expenses are car repairs, home and appliance repairs, and illness. Just 41% of consumers have savings they can tap to pay for these out-of-the-blue costs.
At 28%, older Americans—those age 70 and up—are most likely to use plastic to cover surprise expenses. Those aged 35 to 55 are the least likely to borrow from family or friends to cover these costs—just 5% will do so. Millennials are more likely, at 69%, to use savings or cut back on expenses to cover the costs than to use plastic to pay these expenses.
Survey on Spending vs. Saving in North Carolina
The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation publishes a Financial Capability Study with state and national results. Their recent results show that consumers in Garner and elsewhere in North Carolina are higher than the national average when it comes to spending more than they earn (i.e. debt spending) and lower than average when it comes to spending less than they earn.
When it comes to overdue medical bills, Garner and NC, in general, run higher than elsewhere in the United States. There has been a slight increase in the percentage of people in our state that have an emergency fund over the last three years, going from 37% to 43%. The good news from the FINRA study is that fewer North Carolinians are using non-bank borrowing (i.e. payday loan, title loan, or rent-to-own services).
How Can Garner Consumers Build an Emergency Fund?
Paul Golden from the National Endowment for Financial Education recommends consumers start with a small safety net fund and build from there. Golden says, “Even $500 has been proven to have a psychological benefit. It improves people’s psychological well-being ... Reach a $500 goal, then $1,000.” If your budget is tight, it can be tough to save, but the work will pay off in the long run.
One thing to consider is tracking your spending and expenses for a month or two to see where your money goes so you can look for opportunities to cut back. Another option is to consider a seasonal part-time job and devote all the income to your emergency fund so it doesn’t cut into your current spending. Here are some other opportunities to save:
- Use windfalls to feather your nest: When you get a surprise bonus, birthday cash, or an income tax refund, instead of spending it, put all (or part) in your savings to kick-start your emergency fund.
- Slash expenses: Everyone has vices they could cut out, whether it’s a Starbucks latte, booze, or smoking. Consider not eating out, carpooling to save on fuel costs, or canceling that costly gym membership you hardly ever use.
- Save your pennies: Most of us don’t use cash—we rely on debit cards instead—but your change could change your life. Keep a jar on your dresser and stash singles and coins there, then once a month, put it into a savings account.
- Share where you can: Sharing always cuts expenses. Consider booking a vacation with friends or family to slash accommodation costs. For parties and holidays, go potluck. For birthdays, slip the gifts and spend time instead.
Can’t Afford to Save? Maybe You Need a Debt Intervention
If your debt is so great that you're juggling bills, paying late, or living paycheck to paycheck, you may need a serious intervention. Bankruptcy is a good fit for some Garner consumers. Whether you're behind on house payments or maxed out on credit cards, there may be a bankruptcy solution for you. It doesn't hurt to educate yourself and find out your debt relief options. Contact the Law Offices of John T. Orcutt today. Call +1-919-646-2654 now for a free Garner bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.