BOISE, Idaho — For many of us right now money is tight and saving it can be an issue.
The financial experts at Bankrate found that a quarter of all Americans have absolutely no emergency savings and only 43% of Americans, right now, are able to cover an unplanned $1,000 expense with their savings.
The ideal amount is to have enough money in savings to cover 6 months' worth of expenses, and generationally that varies. Millennials are more likely to have less saved, followed by Gen Xers and then Baby Boomers.
Greg McBride, Chief financial analyst at Bankrate, says how much you have in savings also depends on your income level.
“Across the board, regardless of income bracket, the majority of Americans still do not have an adequate emergency cushion,” McBride said. “We do see that the tendency to not have savings or very little in the way of savings does tend to impact those with low and moderate incomes much more.”
A big reason for the trouble that some people are having with saving is that everyday items – like the price of food and rent - have gone up drastically in recent months. That means more cash goes towards living and less is available to go into their savings account.
“With inflation having stretched and strained household budgets the way that it has,” McBride adds, “it’s very difficult and maybe in some cases impossible, to wait until the end of the month to see what’s left over and then try and save.”
But there are ways of turning that around.
You can begin by paying yourself before anyone else and moving that cash before you see it. That means using direct deposit to route a portion of your pay into a dedicated savings account, so it happens without you thinking about it.
You can also get back on track by setting a tighter budget, cutting out any extra expenses, and tracking your spending. Little by little it’ll begin adding up and you’ll be glad it’s there.
“Unplanned expenses are inevitable,” McBride said. ”People say to me all the time, ‘yeah but every time I get some money saved, something happens, and it wipes out the savings.’ Well, that’s proof that it’s working.”
