How to Build an Emergency Savings Fund & Stop Being Broke

Stop living paycheck to paycheck and learn how to build an emergency savings fund so that you can take control of your financial life.

Having a 6-month emergency savings fund is harder for some generations.

According to a new survey from Bankrate, 66 million Americans do not have emergency savings.

To sum it up:

  • One-third of Americans ages 36-51 years old (Gen X) have savings.
  • Only 27% of other Americans of all ages have anything saved up.

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It’s no secret that it is very important to have an emergency savings account of 6 months of liquid cash so that in the event of an emergency such as losing your job, medical bills, or auto maintenance you will be covered.

But an astonishing only 28% of all Americans, according to the new survey, have put aside any savings into this emergency fund of 6 months of expenses.

The silver lining if there is one?

That percentage has risen by 6% from one year ago.

Furthermore, nearly half of Americans older than 71 years old have enough savings for six months of living expenses.

Millennials (ages 18 through 34) have the same saving habits as Gen Xers, with two-thirds reporting at least some savings.

The one-third without savings should check out ways to save by eliminating debt and alternative money making methods. It may be difficult more millennials are save when they are in low-paying jobs and have crippling student loans. However, it is not your salary that makes you rich, it is your spending habits.

According to the study, half of the Americans with annual incomes of 75K or more have emergency savings fund, while more than half of Americans with incomes of less than 30k have nothing saved.

While top savings for an emergency savings fund competes with saving for retirement, paying off loans, rent, car payments, and all the expenses you incur every month: it still is possible. 

Emergency Savings Fund

How You Can Start Saving Money

But you know what? Over time building better saving habits gets easier and you can start saving money without even thinking about it.

Start small.

Take a look at your budget and all your bills and see how much you have left over every month.

Take a portion of that and put it into a separate savings account where you won’t be able to spend it. Don’t even think about it anymore. Treat that money as if it was already gone. That puts you one step closer to financial freedom.

The best part? Setting a monthly savings goal becomes very addicting very quickly. You will work hard to meet your target and if you don’t, you will be disappointed.

You can also look into using saving apps like Truebill or Acorns. If you’re currently a student then you should consider using top student sites that can help you sort your finances and studies.

Do this for yourself if you already don’t.

And if you are a saver, then always focus on increasing your goal.

You will thank your future self.

Make early retirement and paying off your mortgage a goal and always dream of it.

If you work at it, you will get there.

Silver Lining

The overall picture appears to be improving, however. June marks the 25th consecutive month that Americans’ financial security has improved, with men reporting more security for the 28th straight month.

Women have reported increasing financial security in 16 of 28 months including eight of the past 12.

Sites such as SavingExpert provide guidance and financial clarity for those who need it.

It is no longer the day and age where you need a financial adviser, with the internet you can gather the help you need.

If you have any financial questions feel free to leave a comment below. I am always happy to help and utilize my experience in the field of money to help out fellow young adults and millennials.

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