Some adults can’t pay an emergency expense at all
To break the Federal Reserve data down further, 63% of U.S. adults could cover an emergency expense of at least $400 completely using “cash or its equivalent” (meaning that you covered it using cash, savings or a credit card paid off by the statement due date).
However, among the 37% of adults who revealed they could not fully come up with $400 to cover an unexpected expense without using a credit card or carrying a balance, 13% admitted they were unable to pay for it at all.
If you fall into the latter category, don’t panic: there are a few effective ways to boost your emergency funds so you don’t go into debt over surprise expenses.
Discover how a simple decision today could lead to an extra $1.3 million in retirement
Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.
Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.
Read More3 ways to boost your emergency fund
Having an emergency fund is essential for financial security and can help cushion the blow that comes from unexpected events such as medical bills, car repairs or even a job loss — and it’s never too late to start building one.
Not sure where to start? Here are some tips and tricks to help bolster your emergency fund and offer you some peace of mind.
Eliminate unnecessary expenses
If you’re lacking sufficient emergency savings, the first step is to cut out unnecessary expenses.
Start by tracking your monthly expenses using a spreadsheet or budgeting app. This will give you a clearer picture of your spending habits — and where you can make some cuts.
For example, cutting back on takeout meals and underutilized subscription services are a couple of the little sacrifices you can make in order to set aside some cash each month.
Set up a high-yield savings account
An easy way to grow your money is to set up a high-yield savings account. These accounts offer a higher interest rate than traditional savings accounts. As a result, you’ll generate more money over a shorter period of time.
People also use high-yield savings accounts as vacation funds or to help with major purchases, such as a home renovation or a new car.
In addition, having more than one account will allow you to take advantage of multiple perks, such as higher introductory rates or new account bonuses.
Take up a part-time side hustle to earn additional income
If you want to accelerate the growth of your emergency fund, think about taking on a side hustle outside of your 9-to-5 job. Or, if you’re retired and looking to generate more income, part-time work may be a potential solution.
You can become a rideshare driver, dog walker, data entry specialist or sell your stuff online.
Adding a second revenue stream is a great option to help accelerate your financial growth and prepare yourself for life’s (financial) surprises.
This 2 minute move could knock $500/year off your car insurance in 2024
OfficialCarInsurance.com lets you compare quotes from trusted brands, such as Progressive, Allstate and GEICO to make sure you're getting the best deal.
You can switch to a more affordable auto insurance option in 2 minutes by providing some information about yourself and your vehicle and choosing from their tailor-made results. Find offers as low as $29 a month.
