Do you have emergency savings? Please do!

Do you have emergency savings? Please do!

I still remember when I just started working and there was this one month when I had some unforeseen expenses and I was down to just RM50 for the final week before salary day. I have to pump petrol for my car too. It was indeed stressful. I could ask for help from my parents, of course but it would be something I take as a last resort. So, at that time, I only pumped the minimum amount possible for petrol.

For dinner, I bought food back to my rented room in Penang versus eating out which I would spend extra for drinks. I dared not think what would happen if suddenly one of my car tires burst and I had to pay for a new tyre. That’s why we need emergency funds. Money saved which we are not going to touch or use unless we face an emergency.

Article in cnbc.com Only about 44% of Americans would be able to cover a US$1,000 emergency expense using money from their savings, per Bankrate’s 2024 emergency fund report. And a little over a quarter of adults in the U.S. have no emergency savings at all.

Here are the factors Americans say prevent them from growing their emergency savings and one strategy that can help you easily begin building one.

Inflation is the main obstacle to building emergency savings

Make saving a habit to build your emergency fund and wealth

Read more about emergency savings in the article here: Article in cnbc.com

Not easy to save these days, of course!

A Toastmaster during her speech said that these days, it is not easy to save because there are by far more temptations. So many things to buy. So many holidays we want to go. Flights were not even common then but these days, it is a super common thing. Thus it’s getting harder to save and it’s true but we must. Before we buy, perhaps good to delay it a few days. Sometimes after a few days, we would come to our senses that we actually do not need the item. This has worked for me many times.

Recently, I was in an outlet in Los Angeles. Photo below. I wanted to buy a Timberland’s leather boots. I asked myself, how many occasions would I wear it? I asked myself how many pairs of leather shoes I already have. I asked myself, do I even have luggage space for it? In the end, I chose not to buy it. I saved US$99 (RM440). Not an easy decision but sometimes it has to be done.

If we have no emergency funds

If I did not have the extra money, I could not even go and see the doctor if I fall sick and I could not change the car tyre. All these are unforeseen circumstances. I could use my credit card first but that also meant that if I fail to pay that, then my credit card debt may also start accumulating too. This is why it does not matter how much we earn, we should always have a stash of emergency funds. Do not use it, forget about it and only when it’s emergency that we remember it. All the best.

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