NASHVILLE, Tenn. (WTVF) — From rising prices to job uncertainty and unexpected medical bills, financial curveballs can hit at any time.
But having an emergency fund can make all the difference. Consumer Reports shows us how building that safety net might be easier—and more important—than you think.
You probably have Band-Aids in your medicine cabinet and jumper cables in your car, but do you have a financial emergency kit?
“More and more Americans are struggling to cover basics like groceries, rent, even gas,” said Consumer Reports' Lisa Gill.
Even with unemployment low right now, Bankrate’s annual emergency savings report found that 59 percent of Americans said they couldn’t afford to cover an unexpected $1,000 emergency expense.
And it’s no surprise: inflation, high interest rates, and unstable income are some of the biggest reasons people say they can’t save—or don’t even try.
“Sit down and take a close look at your monthly expenses, and look for easy things you can cut, including Internet subscription services you no longer use, or phone or cable services you don’t need!” said Gill.
When you’re ready to take the first step, Consumer Reports’ simple tips can help you start—and stick with—an emergency savings fund.
First, figure out how much you’d need to cover three to six months of essential expenses—things like housing, utilities, food, transportation, and debt payments.
Next, open a separate savings account just for your emergency fund, so you’re not tempted to dip into it for everyday spending.
“You can keep it in a savings account, but your best bet is to put the emergency fund money into an account that earns a high interest rate or a no-penalty CD.”
And make saving even easier by setting automatic deposits or transfers from your checking account to your emergency fund! It will keep your contributions on track and secure until you need them!
And if you’re struggling with medical bills, Consumer Reports has an important warning: steer clear of medical credit cards or loans offered by healthcare providers. They often come with high interest rates, hefty penalties, and could seriously hurt your credit.
Do you have more information about this story? You can email me at jennifer.kraus@newschannel5.com.
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