Information about planning for retirement is readily available. It’s a favorite topic for personal finance experts. But a bigger question may be: Could you handle an unplanned $1,000 USD expense? A 2018 report from Bankrate found that only 39 percent of Americans say that they would be able to access enough savings to pay for something like a major car repair, a broken furnace, or a health crisis. Experts recommend putting money away in an emergency fund that can take care of life’s expensive curveballs.
Saving some for later:
- More than one-third of households had a major unplanned expense last year, the Bankrate survey showed, with an average cost of $2,500 USD.
- Remove all temptation to spend emergency savings by keeping the funds separate from your everyday checking account, experts say.
- Squirrelling away $1,000 USD is a great start, but ideally, you should have six months of living expenses stashed away so that you could get through a major financial blow, such as losing a job unexpectedly.