Summary of Do You Have Enough Emergency Savings?:
Many Americans lack emergency savings, with half having no savings and 40% having less than $10K set aside, according to a CNBC and Momentive Survey. Financial experts suggest having three to six months of expenses saved for emergencies, but it’s essential to consider factors such as fluctuating income and expense-cutting strategies. Investing in cash-flowing assets like real estate can lead to financial stability and freedom.
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Economic and Financial Circumstances: Are You Prepared with Enough Emergency Savings?
Emergency savings are necessary to cover unexpected expenses and financial emergencies. However, a CNBC and Momentive Survey found that half of the American respondents have no emergency savings, and 40% of those with exigency funds set aside less than $10K. It’s prevalent to overspend and prioritize saving for short-term goals, but what happens when economic and financial situations change abruptly? Here’s what you need to know about emergency savings:
Determining How Much You Need
While three to six months of expenses saved for an emergency is a popular rule of thumb, unfortunately, it doesn’t hold up well against today’s challenges. Besides your expenses, there are other questions one should consider before determining emergency savings, including fluctuations in your salary or take-home pay, ratios of passive and earned income, and identifying which necessary expenses can be reduced in an emergency.
Getting More Money
If having enough emergency savings is a concern, it means your mindset is in the wrong place regarding finances. Financial stability and freedom come from knowing you and your loved ones will have enough during difficult times. Investing in cash-flowing assets, such as investing in real estate, is one way to achieve this. It’s a good idea to seek expert advice to know the best options and verify any information before making investment or business decisions.
Stop Thinking About Saving
You’re probably not there yet if you are even thinking about how much emergency savings you need. The solution is to earn more, put your money to work, and explore different investment options. Financial experts recommend creating a solid emergency fund while working towards achieving long-term financial goals. Having a clear financial plan allows individuals to understand their expenses, savings, and investment options that enable them to get the most out of their money.
Investing in cash-flowing assets can increase income and provide a reliable source of funds to support short- and long-term goals. Registering for free training or seeking expert advice can help guide individuals toward these investment options. However, performing your due diligence and seeking professional advice before making financial decisions is essential.
Conclusion
The economic and financial situation can change without warning, and it’s essential to have emergency savings set aside. Determining how much you need to be based on current economic situations can help ensure you have enough saved to weather any storm. Additionally, investing in cash-flowing assets can increase your income and provide a reliable source of funds for different short- and long-term goals. Finally, it’s essential to prioritize a financial plan to achieve financial security and freedom, with expert advice, due diligence, and careful consideration of potential risks.
