Why saving for the unexpected is so essential: How to plan for emergency expenses
Just when you think that you got the hang of adulting, something happens to remind you that you do not have it all figured out. It doesn’t matter what age you are. No one is exempt, no matter if you have just moved out on your own or if you are pushing retirement age. Emergencies happen and more than likely it will take money to resolve it. But, you’ve got it covered, right? Wrong.
Spending On Wants
Most adults have no problem saving for specific things. If they want a new television they may start saving six months prior to Black Friday for one. A cruise to a beautiful island that they want in on, they’ll arrange a payment plan. Even when it comes to purchasing a new car or a house, people will save for a down payment.
However, many adults do not save for the unknown. They do not set money aside in case of emergencies.
Saving For Needs
Four out of ten adults are not able to cover a $400 unexpected expense without borrowing from someone or selling something. That is very troubling considering that big emergencies can cost far more than that.
Cars break down, water heaters go out, people get sick— the list goes on. Having money saved is essential. Literally, anything can happen and you need to be as prepared as possible for it.
Plan For The Unexpected
The overall financial status of American households has improved. Many people are claiming that they are doing better than the reports show of just five years ago. 40% of adults are reporting that they are they are living “okay” financially and 1/3 report that they are actually living comfortably. That may be the reason why people don’t save. They feel as though they will be able to have it covered if anything was to pop up. However, that is not wise.
Whether you are living comfortably or just making it, find a way to set money aside. All it takes is for one emergency to set you back.