Why You Need An Emergency Fund

Why you need an emergency fund

75% of Americans live paycheck to paycheck.

Are you living paycheck to paycheck? According to the statement above, 7 in every 10 houses in your neighborhood is one emergency away from a crisis. That’s a huge deal! Many families are torn apart because of financial troubles and I refuse to allow that you happen to you! That’s why you need an emergency fund.

Q: What is an emergency fund?

A: An emergency fund is money that can be accessed quickly in case of an emergency.

Before we continue, take a look at the following statistics for Americans:

  • 71% do not have enough money on hand to cover 6 month’s living expenses.
  • 46% do not pay their bills on time.
  • 48% spend as much as they make or more each month.
  • 12% do not contribute monthly to a savings account or any type of retirement account.
  • 11% have credit card debt in excess of $5,000.
  • 12% have student loan debt in excess of $20,000.
  • The average American doesn’t have more than $400 in savings. [1]

If the average American doesn’t have more than $400 in savings and 75% are living paycheck to paycheck, what happens when an emergency happens? Consider the following scenarios: Read more