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Does your family have a 3-month financial cushion?

There's good news and bad news about the savings habits of those living in the United States. The good news is that more Americans have begun socking away money for a rainy-day emergency.

The bad news is that according to one survey done by the Princeton Survey Research Associates International group, 24 percent of those over 18 have zero set aside for life's monkey wrenches, e.g., medical debts or job losses.

The Financial Security Index survey conducted in June by Bankrate indicated that this number was the lowest since they began polling six years ago.

Looking on the bright side . . .

However, at least 31 percent of adults in America have a savings cushion that's considered to be adequate enough to pay out a half years' worth of bills and other expenses. This figure represents the highest that Bankrate has seen in seven years.

That still leaves nearly a quarter of the population without emergency funds, with another two-thirds coming up short on savings.

Make saving money become a habit

Families are learning that having inadequate savings for life's emergencies is nearly as bad as being without any. Having only enough saved to cover a couple of months of expenses can still lead to foreclosures if the housing market crashes.

One of the easiest ways to begin saving is to do it automatically through direct deposits from paychecks into savings accounts. The theory is that what you do not see reflected in your wallet will not be missed.

Your minimum goal should be a three-month reserve to meet all of your daily expenses. However, six months remains the ideal goal. Large families and those with businesses need to aim even higher than that to prevent disaster.

Turn savings into higher revenue streams

You can reach our savings goals faster by utilizing money market or high-yield savings accounts. Annual and quarterly bonuses should get funneled straight into the savings accounts to help reach targeted savings goals.

Still at a loss with your finances? It may be time to review your debts with a personal bankruptcy attorney who can recommend a solid fiscal plan to get you out of debt and on the road to financial solvency.

Source: Bankrate, "One in four Americans have ZERO money saved for a rainy day," Amanda Dixon, June 20, 2017

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Dan R. Dodds Dan R. Dodds

At the Dodds Law Firm, I focus my practice on the needs of individuals who have suffered losses because of abusive, deceptive or unfair conduct by others. I also provide comprehensive counsel in all matters related to Chapter 7 and Chapter 13...Read More

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