According to the latest Bankrate survey released today, more than three in five Americans don’t have money in their savings accounts to cover any unexpected bills such as a $500 car repair or a $1,000 emergency room visit.
In fact, only 38% of respondents said they have enough funds in their bank accounts to cover even the most mundane of spending emergencies. Most others would need to take on debt or cut back elsewhere.
I try not to get too preachy on my blog, but I can’t stress enough how important having an emergency fund is. If you’re couponing and saving money that way, it is worth setting a little of your savings aside for the unexpected things that happen in life.
Last night, my husband’s car wouldn’t start after work. We tried to jump it with my vehicle — no go. Between the age of the battery and the cold spell we’re experiencing, the battery’s life was up, and after dinner we headed out to get a new battery. (Just what you want to change at night in a dark parking lot, right? We opted to change the battery this morning after the sun came up and it was “warmer!”)
When we got to the store, our boys’ eyes bulged out of their heads when they saw what a car battery cost. (In their world, Mom gets packs of Duracells around the $2 mark with coupon deals, and that was their former frame of reference for “battery.”) Even though our new car battery was right around $100, we budget for things like this, and there wasn’t an issue of not being able to afford a battery. Things happen. Life happens. It is sobering to me to read how many people aren’t prepared for life’s speedbumps though.
If you’ve never created a household emergency fund, make 2015 your year to do that. Even our 18-year-old daughter has started to think about starting an emergency fund to cover her car expenses. She found her car’s tires low on the driveway yesterday from the change in air pressure. And, she was happy that all she had to do was add some air, but it was also a reminder that a flat can happen at any time too, and at some point in the future, she’ll have to replace those tires.
montel111 says
Do you read / follow Clark Howard, Dave Ramsey, and / or Suze Orman?
Who do you recommend?
LilBlossom says
A few years ago, we were living from paycheck to paycheck. Then my husband finally finished his Bachelor degree (I can’t recommend wgu.edu enough), and after spending a year or two paying off debt and buying stuff we needed (and wanted), we’re finally starting to put money aside for a contingency fund. When I tripped and broke my (new) phone, it was nice to know that I could just buy another one since we already had money set aside for just such things. Mind you, it wasn’t a fancy phone, just a Samsung Galaxy S3. When my 2006 Chrysler had yet another repair in the thousands, it was nice to be able to say: Let’s get a new one. And get 0.9% interest. But it hasn’t always been like that, and when it’s not, even putting aside $10/mo can be hard. We were there. And it was no fun. Whilst I see the need for an emergency fund, starting one can be very hard, especially when you’re already scraping by every month.
VJB says
I have decided this year is my year to get out of debt. No vacation this year. Working an extra shift each week. And my tax refund is going to pay off the kids school tuition and my Ashley Furniture card. That is going to free up $550 a month for me. And I will be using what’s left of my refund to start my emergency fund and the extra money i am not using to pay tuition and Ashley to pay down my credit card debt. I have to keep the big picture in mind. I wanted to get a nice 8-9 foot Christmas tree in the after Christmas clearance for next year but I mulled it over and talked myself down (lol) I really want to know the freedom I felt when I paid off my car (i can only imagine what it will feel like when I start paying off my debts!)
Outlander says
They are about to talk about this on Meredith Viera show right now! :)
I was always lucky that my DH made enough for our family to live comfortably and be able to travel too. I am also very frugal and make just about everything from scratch or DIY. We also rarely use credit cards, but when we do, we always pay off our credit cards in full every month. Our car is 14 years old and paid off a long, long time ago.
But, anytime we had any extra money (tax refunds, grandparents gifts…) it ALL went towards our mortgage principal.
So I am happy to say that as off 12/31/14 we have paid off our house in full!!! It took us exactly 10 years and we had a 15 year mortgage. I am 41 and my DH 51. No more mortgage!! Yay!!
clarkies4891 says
This is becoming a lost art! Credit seems to be the accepted way of life now. So, so, so glad to see this on here :) We follow Dave Ramsey. We use envelopes, pay cash, still carry one major credit card, just in case. While my children (ages 20 and 14, boys) know to shop for a good deal (they always show me how well they did :), I think we missed the mark a bit on teaching them the bigger picture. Trying to play catch up now :)
Supermom10 says
I think this was a very good post. I grew up the same way. I was able to put money away for emergencies early.
As you said – even just a little every week is something. If anyone has money coming in, then they should be able to save something.