WASHINGTON — How prepared are you for a financial emergency? A new Pew Charitable Trusts’ poll found that 57 percent of Americans are not prepared for a financial emergency. Furthermore, a third of those polled didn’t have any savings in the bank.
To build up your savings, Harrine Freeman, a financial trainer in Bethesda, Maryland, says you should start by handling your money like your grandparents or great grandparents did.
“They only bought things they can afford and they always saved for a rainy day,” Freeman said.
When it comes to how much should you save, Freeman says you should have enough money standing by to pay all your bills for six to 12 months.
To begin saving, you may need to spend less, and that might include downsizing your lifestyle. Moving to a smaller home, getting a less expensive car and cutting your vacation travel in half are some of the big dollar moves you can make to save Freeman said.
Also, you may want to consider dining out less and instead of going to the coffee shop, bring a cup of joe from home.
Loose change can bring about change of its own in your financial future. Freeman says depositing all the loose change you have into a savings account can really add up over time. Also, she says many banks have programs that will allow you to automatically save the change from your accounts into a savings account.
Freeman says it’s best to set up automatic savings, whether it be through work or on your own.
“If you automatically save, you won’t even notice the money or realize that you are actually saving,” she said.