What do more than a third of residents in the United States need that they don’t have? It certainly isn’t a cell phone. According to an article in the Washington Post in 2011, we already owned more cell phones in the US than there are citizens:
“The number of mobile devices rose 9 percent in the first six months of 2011, to 327.6 million — more than the 315 million people living in the U.S., Puerto Rico, Guam and the U.S. Virgin Islands.”
It isn’t cars either. Almost 80% of Americans own a car. They may not be new, but they appear to work:
“253 million cars and trucks on U.S. roads. According to a June 9, 2014, study of an automobile industry research firm, the average age of a vehicle is 11.4 years. The firm reports that the average vehicle age has plateaued at that number. IHS Automotive reports.
So what do we need that we don’t have?
A savings account. — sad but true.
According to a recent GoBankingRates survey, 69% of Americans have less than $1,000 in savings, while 34% have no money in the bank whatsoever.
How much money do you have in the bank that isn’t already earmarked for a bill or a special one-time expense?
If you were to have six month’s salary saved in the bank – how much money would that be and how close are you currently to achieving that goal?
In a recent article about the reasons behind why Americans are filing for bankruptcy even those with medical insurance struggle financially as result of a medical emergency. In too many cases, that financial struggle leads to bankruptcy.
“According to the Kaiser Family Foundation (KFF), more than a quarter of U.S. adults struggle to pay their medical bills. This includes folks who have insurance, whether independently or through an employer. In fact, medical debt is the No. 1 source of personal bankruptcy filings in the U.S., and in 2014, an estimated 40% of Americans racked up debt resulting from a medical issue.”
Writer Andres Riobueno, counsels his readers to start up a medical savings account:
“Having a savings account makes the money easily available to you. Thus, your savings account also serves as an emergency fund. To make sure that there will be sufficient funds to cover unexpected expenses, you should set aside three to six months of your income for emergencies. Having a substantial emergency fund can also help you stay out of debt, or at least reduce the amount you would need to put on a credit card in an emergency. Using too much of your available credit can have a negative impact on your credit scores and, if you have so much credit card debt you can’t afford to make the payments, you will definitely hurt your credit.”
How do you go about saving for that emergency fund? Sadly, it will require more effort than the results of a “swear jar” or penny jug can accumulate. Carla Fried offers 7 Ways to Save When You Don’t Have Any Extra Cash. Here are just three that you can start today:
- Sock it away before you see it. Use an automatic deposit to siphon off a portion of your paycheck into your savings account. If you never see it – it will be harder to spend. Also, the next time you get a raise – calculate that amount and add that to the automatic savings deposit. It is a quick way to give your savings account a raise without impacting your spending.
- Check those auto-pay accounts. Review your credit card statements closely for those automatic renewal charges that can add up quickly. Often we make purchases that result in an auto-renewal we were unaware of. Also, take a close look at some of those expenses: do you really need Netflix, Hulu AND Amazon Prime?
- Drop down a tier. Fried suggests examining your cell phone bill to see if there is a way to reduce your plan to a more affordable one. Make sure that you add that monthly savings to your auto-deposit each month.
If you have never had a savings account, getting started may seem difficult. But too many many of us live paycheck to paycheck. If that is the case for you, you are not alone:
“49% of Americans are living paycheck-to-paycheck. Considering that the Census Bureau estimated a U.S. population of 323.1 million last summer, 77.2% of whom are adults 18 and older, this suggests that up to 122 million Americans are currently living paycheck-to-paycheck.” Motley Fool/Retirement
Considering going out two nights a week instead of three and saving the difference. Do you really need cable TV as well as an online streaming service?
We at the Bankruptcy Advocates have helped our clients with their budgets for over 25 years.
Southern Illinois Bankruptcy Attorney law firm Bankruptcy Advocates is located in Carbondale and serves a wide geographic community. The first consultation is always free. Give us a call at 618-549-9800 or email us at [email protected] to speak about your case or legal matter. Convenient appointment times are available.