Do you have enough money to cover one month of expenses? If you don’t, then you are not alone. A staggering 77% of Americans don’t have enough money to cover one month of expenses.
A recent survey by Forbes Advisor shows a staggering 40.7% of respondents find themselves in this precarious financial situation.
Even households with six-figure incomes are not exempt from living paycheck to paycheck, with 34-39% of respondents earning more than $100,000 revealing that they have no funds remaining after covering their monthly expenses.
Nearly half of respondents (49%) selected high monthly bills (including housing and utilities) as the primary reason they’re living paycheck to paycheck, and 77% lack enough emergency savings to cover one month’s expenses.
1. Automate Your Payments
Your emergency fund won’t grow very quickly if you keep forgetting to add to it. How can you stop your contributions from slipping your mind? Automate your money transfers from your checking account into your savings account through your online banking. This way, you’ll build up your fund without thinking about it.
2. Increase Your Income
If you’re impatient for your emergency fund to grow, you can try to increase your income so that you can make bigger contributions every month. How can you do that? Depending on your current job, you could ask for a pay raise or take on more overtime hours to bulk up your upcoming paychecks. You could also take on a side hustle, like selling second-hand items online in your free time. You’d be surprised by the profits that you can rake in!
3. Use Your Windfalls
Sometimes, you’ll be lucky enough to get a windfall, like a generous workplace bonus or a relative’s surprise inheritance. Take advantage of this sudden influx of funds!
You don’t have to put the entire windfall into your emergency fund, but at least put a portion of it there. It will instantly give your emergency fund a big boost without too much effort on your part. You’ll get one big step closer to your savings goals.
4. Change Accounts
After you’ve accumulated significant savings in your emergency fund, you should consider moving the total into a high-yield savings account. A high-yield savings account has an interest rate that will help your balance slowly grow, making your safety net more secure the longer that it sits there.
It’s time to build and boost your emergency fund. The sooner that you fill it up, the better.