Americans Don’t Set Aside Money For Emergency Fund
Save for a rainy day. Save for the future. These are common adages used by financial gurus and parents often tell their children the same thing. This sounds easy. But for most Americans, saving for the future is not a popular habit.
To probe the financial habits of Americans, Fifth Third Bank (NASDAQ: FITB) conducted a study on the approaches of Americans to saving for the future.
The study revealed that many Americans don’t save to support their financial goals. And surprisingly, 47 percent of respondents answered they frequently live paycheck to paycheck, meaning they have no savings at all. These are the working poor.
Saving For Future Events
Are Americans ready for ER visits? Is setting aside saving for an emergency fund a common habit among Americans? The Fifth Third Bank has interesting answers to these questions.
The study revealed that most Americans are unprepared for the unexpected or an emergency situation. In fact, more than half of those surveyed know an emergency fund should hold six months of living and yet, two-thirds of Americans or 69.3 percent of survey respondents don’t have that amount in savings.
In addition, 30 percent don’t have an emergency fund at all.
How important is giving priority to an emergency fund?
According to Jada Grandy, senior vice president and Community Reinvestment Act strategies director at Fifth Third, setting aside six months of income for an emergency fund and planning for years of retirement seems an impossible task. But, determination pays dividends for those who want to save a little for an emergency fund.
“Saving a little away today can mean a lot is available tomorrow.” – Ms. Grandy
So this is like saying, one can start by saving a little amount a week or by starting with smaller goals.
In addition, stashing cash for an emergency fund yields advantages. Building an emergency fund can help during job loss, major health expenses, funeral costs, and even home or car repairs.
The Cincinnati, Ohio Fifth Third Bancorp financial services company Amonghas $141 billion in assets and operates 1,254 full-service Banking Centers, including 95 Bank Mart locations. The company says most of its locations are open seven days a week, inside select grocery stores. They also have 2,593 ATMs across 12 states.