Each week, we are sharing a financial wellness tip to help you make the connection between financial management decisions, your overall wellness, and student success. Money touches every aspect of our lives, and a lack of financial literacy can cause unnecessary stress and negatively impact our mental and physical health.
More Reasons to Build Your Emergency Fund
A recent survey from SecureSave found that 67% of Americans could not cover a $400 expense and 74% are living paycheck-to-paycheck where they are unable to save. Rising inflation has made most goods and services more expensive, and though average incomes have increased approximately 5%, this is less than the inflation rate. Financial insecurity has increased stress levels about finances and has even had an impact on productivity at work.
The lack of, or the need to spend from one’s emergency savings is also impacting our ability to save for long term goals - such as higher education, a home, and retirement. In order to provide some financial security, financial planners recommend establishing an emergency savings fund of 3-6 months of living expenses to cover any unexpected costs. Your emergency savings should be deposited into a savings or money market account that protects principal.
Building an emergency fund seems daunting - so where can you start? Try spending less than you make, start saving as early as you can, and make savings a habit. With today’s higher inflation and draw down of savings, it is very critical to establish and build your emergency savings account.
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