Saving You Money: Survey shows many are not financially prepared for an emergency
STATEWIDE (WGME) -- A new survey shows more than a third of Americans are not financially prepared for an emergency.
"A lot of people don't prepare for the unexpected," says Jon Paradise with the Maine Credit Union League. "Either they can't because of the salaries that they're making, or their situations."
A new Bankrate survey backs that up. It says 34% of households had a major unexpected expense over the last year, with only 39% saying they could cover a $1,000 blow in savings. Most of the time, however, the emergencies cost twice that, $2,500 or more.
"It's scary to realize that a lot of people are just one, not monumental emergency away, but one semi-minor emergency away from really being in financial trouble," Paradise says.
Paradise says this highlights the importance of having an emergency fund that can cover at least 3-6 months worth of spending.
"So that's a goal to set, maybe you're not going to achieve it in 2018, maybe you're only going to do two months, but it's something to shoot for," says Paradise.
For those who struggle with saving, Paradise says the key is to start small.
"If you haven't been saving $100 a week, don't all of a sudden say, 'I'm going to set up automated savings at $100 a week,' that's not realistic, maybe $10," says Paradise.
Change certain spending habits, try making coffee at home and bringing lunch to work a few times a week.
"My advice is do something," Paradise says, "anything that you do that takes a look at your finances and you change one habit, it's going to make a positive impact," Paradise says.
Paradise also recommends checking to see if there are any fees associated with your accounts or credit cards that you might be able to avoid by changing companies.