One thing I know Americans like to do is spend money. I like to spend money. It feels good to just know that you got money to spend. Buying things in the store or receiving a package in the mail feels good. But, at the end of the day how many of Americans have enough emergency savings to continue paying their bills for six months or more? With 3 million Americans expected to have filed for unemployment within the last week, I doubt many of us have a comfortable emergency savings.
Although filing for unemployment doesn’t mean that you don’t have enough money in emergency savings. Some people can afford to pay their bills for the next six months but rather not blow through their savings if they don’t have to.
And if you don’t have enough emergency savings to pay your bills for six months it doesn’t mean that you’re an undisciplined spender or don’t think about the possibility of an emergency. Many Americans spend their money wisely and still find it hard to put a lot of money away in savings.
Once life goes back to normal I hope many Americans take into consideration the importance of an emergency fund. I only need $21,000 to pay my rent for 12 months. With the money I make now if I save $500 a month that’s $6,000 a year. In 4 years I can save $24,000 which is more than enough to pay my rent for a year. Of course that just covers the rent. I’ll need more to cover car bills, food, etc. But it’s more than enough to cover rent and other bills for at least six months.
Hopefully after this COVID more Americans start to think twice about buying a new pair of shoes that they don’t need and think more about balancing their emergency fund. We all have to move on and enjoy life, but we also need to be more serious about preparing ourselves for the next emergency because it doesn’t always have to be a global emergency but a personal one as well.