Saving is something many people wish to do more of, but a study finds 58% of Americans have less than $1,000 tucked away in their savings.1 Because we live in a society of consumerism and consumption, we spend beyond our means and have little to no fallback funds to face hardships. While emergencies are inevitable, having an emergency savings can help you avoid financial setbacks. Here are three simple steps you can take now to help get you saving more:
- Calculate your monthly expenses. Having an idea of how much you spend each month will help you determine your optimal fund size. Gather your credit card and bank statements for the last month so you can see what your current living expenses are. You’ll want to list and breakdown your expenses under different categories. Finally, you’ll want to sum up each category along with calculating the overall total.
- Find opportunities to cut back. From your breakdown of expenses, you should be able to find areas where you can cut back on spending. By decreasing your expenses, you’ll be able to free up existing income to increase your savings ability.
- Identify your goal and implement. The amount you should have in your emergency fund depends on your income, expenses, and lifestyle. Now that you have a clearer understanding of your spendings, the rule of thumb is to put away at least three to six months’ worth of expenses. It may seem unreachable at first, but the idea is to start off small. Even $10 or $15 a week is a good start and will soon add up. Continue tracking your monthly expenses and adjust your contributions as necessary.
Emergencies can occur at any moment. If you start saving today, the money you save can go a long way when it comes to weathering a financial storm. Got questions or need guidance? Connect with us and we can develop a customized strategic plan to help guide you to your goals.
This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.
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