Survey says: 63 percent of Americans have no emergency savings for things like a $500 car repair
This statistic surfaced in a Bankrate.com Money Pulse survey. It means that most people live paycheck to paycheck. If you’re one of them, you know the angst that comes from worrying what will happen if you’re suddenly hit with an unexpected big expense.
What are the possible consequences of facing such an expense without savings? 4 in 10 respondents said they or an immediate family member faced one during 2015. Only 57 percent of them, just over half, ended the year financially unscathed.
The practical, biblical way to protect your family against this kind of calamity is to save regularly. But saving is not a popular discipline. Only 25 percent of working Americans save 10 percent of their income, while 21 percent don’t save at all. This means millions of families, including Christian ones, are flirting with financial ruin.
The good news is that if you’re among these statistics, you can begin now to build a financial safety net. Here’s how to get started.
Build a Cash Cushion
While regular expenses are often cited as a reason for not saving, you can still take steps to start building a safety net. Here are some to consider:
- Track your daily, weekly, monthly and yearly spending.
- Look for ways to reduce spending; remember that little things add up.
- Create a budget after assessing your true needs; think of your budget as your guidepost.
- Tithe first; this nurtures the connection between your faith and your finances.
- Even if you start with a small amount, budget for monthly savings and deposit regularly to make it happen.
- Deposit savings before paying expenses.
- Consider consolidating loans to reduce interest costs.
- Include debt repayment in your monthly budget.
- Pay off credit cards monthly.
Protect and Build Your Savings
As you curb your spending habits and start saving, you’re beginning to build your safety net. Protect it by refusing to use it on impulse purchases. You can do this by keeping it in a separate savings account. And build it by slowly increasing the amount you regularly deposit. Another way to build it is by choosing the right account. ECCU offers members a range of options:
- Just beginning to save? A basic Savings account is probably all you need. It’s free with a $100 minimum balance.
- As your savings grow, a Money Market Savings account offers more interest.
- When you’re well on your way to investing in your safety net, a Promotional Certificate could give you even higher returns.
- When you’re ready to save for retirement, consider tax-deferred Traditional and Roth Individual Retirement accounts
Besides the peace of mind that a safety net brings, saving with ECCU means your money also helps provide loans to churches and low-cost banking services to missionaries and Christian organizations worldwide.