Health & Fitness
Expecting the Unexpected: Ways to Save for a Rainy Day
A recent survey shows that in the face of job loss, significant medical expense or urgent car repair, nearly a third of Georgians have no savings designated for emergencies.
CONSIDER THIS: According to statistics from the Federal Reserve, the U.S. Census Bureau and the Internal Revenue Service, 62 percent of adults nationwide have no emergency savings. This sobering reality is true in Georgia where 32.7 percent of respondents to a recent Georgia Credit Union Affiliates (GCUA) survey said they have no savings account designated for emergencies. When asked how long they could cover essential expenses if they were to lose their job or other source of income, 27.6 percent of respondents indicated they could not cover even one month.
In an economy where paying monthly expenses is a difficult task, many people have given up on saving for those inevitable "rainy days." Is it possible to be ready for the unexpected even in a tough financial climate? How can Americans get back to building and maintaining a healthy emergency fund?
The majority of Georgians who are able to save remain cautious about spending their savings. Fifty-six percent of respondents to GCUA's survey indicated they have not used their savings to purchase a non-emergency item within the last 12 months.
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When asked if they were disciplined or occasional savers, respondents said:
- Very disciplined - 21.9 percent
- Somewhat disciplined - 41.7 percent
- Occasionally save - 30.3 percent
- Never save - 5.2 percent
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You may want to know:
1. What is the average American family's savings account balance?
2. What percent of working Americans are saving for retirement?
3. How many Americans contribute regularly to their savings?
4. What are some ways people may be able to increase the amount of money they are able to save each month?
Insider's Perspective:
"Having a few thousand dollars set aside for unexpected emergencies should be high on everyone's financial priorities," said Daniel Caldwell, president and CEO of 1st Choice Credit Union in Atlanta. "Unfortunately, we can tell by overall deposits that a significant number of our members are not currently saving for a rainy day. Difficult financial times have prohibited them from focusing on savings."
According to Caldwell, one of the biggest roadblocks to saving is that people often don't believe they can do it.
"Most people don't have significant expenses they can cut out to free up large sums for saving, so they give up before they really even try," he said, suggesting people examine where they spend their money and look for little things to cut. "Try taking your lunch to work or forgoing things like soda at the grocery store. Those little things will add up to bigger amounts."
If people have trouble staying motivated, Caldwell recommends trying a visual aid to showcase concrete results - such as a jar to keep the money not spent on frivolous purchases. If that doesn't work, try direct deposit.
"The funds that leave your account automatically will be less available to you, and that will make it easier to save," Caldwell said.
http://www.georgiacreditunions.org/considerthis/2013/apr/apr13.html
