An unexpected expense can wreak havoc on your monthly budget or leave you scrambling to find a way to cover the bill. However, according to a report appearing in USA Today, many Americans do not have the savings to cover an unexpected expense of $1,000. Approximately 75 percent of households earning less than $50,000 per year and 66 percent of those earning between $50,000 and $100,000 annually stated that they would "have difficulty" raising $1,000 for an unexpected expense. A study conducted by the Federal Reserve found that 47 percent stated that they could not cover even a $400 unexpected expense without having to borrow money or sell their possession. Although many people turn to payday lenders to cover emergency expenses, a better plan
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The funds are there for when you need money now to cover a necessary, urgent and unanticipated expense. To illustrate, your annual property taxes may be necessary and urgent, but they are not unanticipated. Birthday and holiday gifts do not meet any of the three criteria. Neither does a fantastic sale on vacation packages, camping gear or clothing.
How to Create a Rainy-Day Fund You Can Tap if You Need Money Now
Having a personal slush fund can give you peace of mind; you know that you will be able to handle the situation if you find that you need money now. Furthermore, even though financial emergencies are not pleasant, having emergency money available to cover expenses can be emotionally satisfying. Here are some tips to help you build your personal rainy- day fund.
• Break your goal into smaller goals. If you want to have $500 available if you need money now, the total sum might feel intimidating. Instead, break the total into amounts that you can easily achieve. For example, start by committing to save $20; once you meet this goal, immediately commit to saving another $20 and repeat until you have saved the total amount of emergency money that you want to have in your slush
The funds are there for when you need money now to cover a necessary, urgent and unanticipated expense. To illustrate, your annual property taxes may be necessary and urgent, but they are not unanticipated. Birthday and holiday gifts do not meet any of the three criteria. Neither does a fantastic sale on vacation packages, camping gear or clothing.
How to Create a Rainy-Day Fund You Can Tap if You Need Money Now
Having a personal slush fund can give you peace of mind; you know that you will be able to handle the situation if you find that you need money now. Furthermore, even though financial emergencies are not pleasant, having emergency money available to cover expenses can be emotionally satisfying. Here are some tips to help you build your personal rainy- day fund.
• Break your goal into smaller goals. If you want to have $500 available if you need money now, the total sum might feel intimidating. Instead, break the total into amounts that you can easily achieve. For example, start by committing to save $20; once you meet this goal, immediately commit to saving another $20 and repeat until you have saved the total amount of emergency money that you want to have in your slush