Do you have enough savings for an emergency medical treatment?
What if your car stops working or your roof gets damaged after a storm?
In any of these circumstances, you’d need a few hundred bucks (in the best-case scenario!)
to cover the costs.
With that in mind, the best thing you might do is build an emergency fund.
Bankratefound that only 40% of Americans are able to cover a $1,000 emergency expense.
About 20% would use their credit cards, whereas 10% would borrow money from family or friends.
Meanwhile, consumer debt hit a new record for over 90% of U.S. households, reportsBloomberg.
The rising inflation only makes things worse.
We can all agree that having an emergency fund is a must, especially in these uncertain times.
How muchmoney you should savedepends on your age, income, lifestyle, and other factors.
How much should you save for emergency expenses?
For example, Current has a 4% APY and no minimum opening deposit, according toFortune.
Plus, many banks offer extra perks, such as free ATM withdrawals or free online banking.
But what if you’re living paycheck-to-paycheck?
In this case, remember that saving something, no matter how little, is better than saving nothing.
Lynnette Khalfani-Cox, a personal finance expert, recommends saving in a cyclical manner.
Basically, you should set aside more or less, depending on how much you make each month.
