If our income sources dried up, we’d have to hope there wouldn’t be a drought that would kill our garden because we wouldn’t last a month on our savings. I wasn’t surprised to read a recent 24/7 Wall St. article that pointed out nearly half of Americans or 48 percent don’t have enough savings to last more than one month without steady paychecks or Social Security checks. After reading the RetailMeNot new survey, I decided I need to get serious about having an emergency savings fund. Evidently, 52 percent of Americans do have an 8 months emergency fund, which could carry them through rough times.
Getting my husband on board
Men seemed to be more in the dark about their personal savings situations compared to women. The survey showed 30 percent of men did not know how much they had in savings compared to 20 percent of women. Since I handle the finances, my husband isn’t too aware of what’s available in case we lose an income source. I realized I had to bring him on board so he would be motivated to spend less on frivolous things so we could build up our savings. He was upset to find out we had so little in savings.
Being worried about retirement
Although I don’t do a great job saving for emergencies, I do have money set aside for retirement in our Roth IRA and 401(k) accounts. According to the survey married people were less concerned about whether they would have enough for retirement. I know we are not as stressed about retirement because we each have separate retirement accounts. Too many people we know are losing their jobs decades before full retirement age. We don’t wan to tap our retirement funds in a financial crisis.
Saving up a little at a time
Another recent study revealed 36 percent of Americans didn’t even have $1,000 in savings. Although we have three times that amount it wouldn’t even last a month since our expenses high. It’s frustrating to start with a savings account that is so small, but we decided to go back to the frugal habits we had when we were trying to save up for our down payment on our house. We saved up more than $20,000 in just one year because we were motivated by our goal of homeownership. One way we make savings easier is by enrolling in a “save the change” program through our bank. Our bank automatically moves some money from checking to savings to help us gradually save up.
If we had a major financial setback such as job loss, we would drastically reduce our bills by getting rid of cable, eating out and all entertainment. As a dual-income family, we aren’t as vulnerable as people who depend on one income. Still, our goal is to build up an emergency fund of about $20,000 so we can stay level headed in a financial crisis.
More from this contributor:
How Debt Snuck up on Me
I Should Move to a Debt Free State
I Refused to Pay Off my Husband’s Credit Cards