by Josie Filippelli
During these newly unpredictable times many individuals have lost their jobs. According to The Pew Research Center, the unemployment rate has risen from 6 million americans just before the covid 19 out break to 20 million in current day. This is a 14 million increase. With these skyrocketing rates it makes it even more challenging to find a new job than ever before. Unfortunately, most Americans are not prepared with an emergency savings fund to help them. Infact, 28% of Us adults do not have an emergency fund.
So what is an emergency fund? It is a budget that you personally set which helps insure that you are prepared for the unexpected. It is suggested that everyone has at least three months of your living expenses saved if you are in a household with two incomes and six months if you are living off your income alone.
One way you can do this is by putting away 30% of your income for your savings account. Other ways that can help you achieve this goal is by living within your means. For example, if you are looking at buying a new car that is out of your price range just because you know you are able to currently afford it you should adjust what you're looking at to help you build onto your emergency fund. You can never be guaranteed that you will always have your job or that you won’t run into a situation where you need a little extra money to help you get by. Another example of how you can save money for an emergency fund is reviewing your weekly expenses. If you are used to going out to a restaurant for dinner a few nights a week you should look at switching it up and saving your money.
As we’ve seen in recent months, it is extremely important to be prepared with an emergency fund. Overall you can see that watching your spending will help you grow your emergency savings fund. Do yourself a favor and plan for an emergency fund.
https://www.youtube.com/watch?v=SaGPvzaJgRM&feature=emb_title
Works Cited
“Saving for an Emergency.” How Much Should You Be Saving for an Emergency?, www.wellsfargo.com/financial-education/basic-finances/manage-money/cashflow-savings/emergencies/.
Kochhar, Rakesh. “Unemployment Rose Higher in Three Months of COVID-19 than It Did in Two Years of the Great Recession.” Pew Research Center, Pew Research Center, 26 Aug. 2020, www.pewresearch.org/fact-tank/2020/06/11/unemployment-rose-higher-in-three-months-of-covid-19-than-it-did-in-two-years-of-the-great-recession/.
bank_admin. “What Is an Emergency Fund?: Discover.” Discover Bank - Banking Topics Blog, Discover Bank, 21 Feb. 2019, www.discover.com/online-banking/banking-topics/emergency-fund/.
I really liked this piece and how you reflected back on this past year on how some people didn't have an emergency fund and it makes me want to start one now just in case something like corona happens again. REally nice job!
ReplyDeleteI like how you connected this topic to current events, such as COVID-19. I also like how not only did you explain what an emergency fund is and how it is beneficial, but you explained how to contribute to an emergency fund based on personal life circumstances like living on your own income or living on yours and another's. In addition, it's insightful that you included that people may need to adjust their emergency fund because of certain living situations or look over their weekly expenses to see how they can change their living habits.
ReplyDeleteIt's good to be in the mindset of "just in case". Those who think "this won't happen to me" are the ones with money problems. Any amount of extra cash that is put into an emergency fund will help out at a moments notice.
ReplyDeleteThis article makes me curious about how many people within those 14 million additional job loses do not have emergency funds. Especially because many of these jobs may be smaller businesses that didn't have income for months at a time due to the pandemic, so it would probably be more difficult for these people to put money aside in an emergency fund since their income is probably already fairly low. So, maybe the percentage of Americans within this group is higher than the 28% of people who do not have an emergency fund.
ReplyDeleteWhat about people who are in high school? Is there a way we can begin saving now and through college that would result in us having a safety net in case jobs are limited? I really like how you gave many examples, however, some do not pertain to us as much. We aren’t going out and buying cars but rather spending our money on eating out, activities with friends, and grocery store runs for snacks. Limiting the amount of “fun” money we spend could make us more prepared for the future and after college.
ReplyDeleteI know you said 28% of adults don’t have emergency funds in America, but I wonder what the percentage of the people who lost their jobs actually have an emergency fund. I feel like a higher percent of people without an emergency fund would be higher in the group of people who lost their jobs because they would be making less money now and they might be using their emergency funds to pay for basic necessities. It was smart to include the actual numbers for the increase in people unemployed and compared it to what it was before Covid-19. After reading this article I am thinking I should start saving more money and budgeting where my paychecks go.
ReplyDelete