Most people would agree that it’s a good idea to save for the unavoidable “rainy days” that crop up. When the car suddenly needs repairs or an appliance stops working, or medical bills unexpectedly hit us, ideally we’ve got a few dollars saved to handle those unexpected expenses.
How many people really have budgeting strategies in place to help increase savings that can cover unexpected expenses? Each year the Federal Reserve tracks this information, and their most recent data shows that among parents living with a child under 18, just 54% have emergency savings available.
For that other 46% of people around the country, the question is this: How can you start building a bit of savings to handle those unexpected expenses that inevitably pop up?
Fortunately, there are really good answers to that question.
There may be ways to save that you haven’t considered. Sit down and write out all your weekly expenses – even the tiniest ones. Could you save on gas costs by doing all your errands just once a week, instead of running to the store nearly every day? Or could you carpool to run errands with a friend? Could you save a few dollars (and eat healthier!) by bringing lunch with you to work instead of buying something each day, or by bringing your coffee in a reusable mug from home?
If you drop into one of our offices, our Friendly Franklin Folks will be happy to talk through budgeting strategies with you.
Another one of our powerful budgeting strategies that our team members are happy to talk through with you is converting high-interest debt into a fixed-rate loan. If you are paying interest on credit card debt each month, it’s probably a high rate that can snowball. All that money you’re paying in interest to credit card companies is money you could otherwise be saving for unexpected expenses.
Converting that debt to a personal loan can help you take control. With a fixed rate and a payment schedule that works for you, your monthly personal loan payment on the same debt could be notably lower over time. And you’ll know exactly how much you need each month, which makes budgeting and planning much easier.
Georgia residents: If you speak with someone at 1st Franklin’s Investment Center, they can help you grow as little as $25 into a solid emergency expense fund over time. Each day, you will earn interest on the money you’ve put into your account. If an unexpected expense suddenly appears, money you’ve put on the Senior Demand Notes savings path is available anytime. There are no penalties for taking it out. With different savings plan options available, our team can walk you through all of the possible ways you can save and invest. And we’re happy to keep on answering your questions as your savings grow.
Even if you don’t live in the state of Georgia, talk to your local bank about opening a savings account where you can put aside a little money each month that will grow over time.
Unexpected expenses are always a challenge, even when they pop up thanks to good news, like a new baby in the family or extra curricular school activities that will lead to a brighter future.
If you aren’t comfortable with the amount of savings you have today for unexpected expenses, you’re not alone. According to a Bankrate survey of 1,025 people released last summer, 58% said they were concerned about not having enough emergency savings. That’s a sharp spike from the 48% of people who were concerned about their lack of savings in 2021.
Now is a great time to start doing things a bit differently and begin budgeting strategies to build a rainy day fund you can count on.
Find a local branch near you to continue the conversation about budgeting strategies with our Friendly Franklin Folks!