It is important to set aside money, not only for “rainy day” emergencies and settling debt, but also for major expenses, such as education, a home, cars, and eventually retirement.
Despite the beating the economy took in the recession, a recent survey shows half of American families have no savings or less than three months’ worth of expenses saved for emergencies. Analysts say the recession—during which Americans lost about $16.4 Trillion in household wealth by 2011—should have been a learning experience, but the struggle of manipulating household expenses has left a lot of folks without extra funds to save. Only about 23% of those surveyed have savings that will last them six months or more in case of a financial emergency—the recommended amount.
Financial Advisor Recommendations
In savings, have enough to at least cover three months of rent and expenses.
If possible, set aside at least one-fourth of your income each year for those unexpected “rainy day” expenses, as well as big purchases and retirement.
Although it is not always possible to meet your saving goals, the best way to start is by saving a little at a time and then increasing the amount as your earnings rise.
Once you develop a budget within which you can live comfortably, you might want to look at ways of cutting back on other expenses or creating more income.
Conveniently, there are free budget creation tools available at www.settleitsoft.com. Found in the Budget-iTsoft section, you will be able to prepare a budget and achieve your saving goals.
You may want to speak with a certified financial planner about ways you may cut costs and earn more off the savings you already have.
More information about Saving for a Rainy Day including Budgeting Like a Pro and Investment Options and Retirement Accounts as well as other financial tips may also be found at the SettleiTsoft® website.