Setting aside money for an emergency fund is the best way Millennials can protect themselves should one occur.
November 30, 2017
One of the most effective ways Millennials can protect themselves from a financial crisis is to have an emergency fund in place. In order to prevent Millennials from getting caught off guard due to unexpected expenses, national nonprofit American Consumer Credit Counseling has provided emergency savings starter tips.
“Unfortunately, it’s easy to fall behind on bills if confronted with an unexpected expense, whether it be medical, a major housing or car repair or some other emergency,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “Setting aside money for an emergency fund is the best way Millennials can protect themselves should one occur. An emergency fund should be enough to cover three to six months of expenses.”
According to a new survey by [Earnest, Amino and Ipsos, 68 percent of Millennials could cover $500 in an emergency without falling into debt, compared to the 43 percent of Americans in other age categories who say the same.
American Consumer Credit Counseling provides Millennials with important tips on how to budget for emergencies:
1. Start small – Millennials should take a look at their budget and figure out a realistic amount of money that can be set aside into their emergency fund. Do not forget to include it as a “new expense” in your budget. Whether it be $10 a day or $10 a week, it is important for Millennials to start with an amount their budget can handle.
2. Reduce Spending – Are there specific areas you can cut back? Some ways Millennials can save on everyday expenses include making meals at home, remembering to turn off the lights, and reducing their cable subscription. For more tips on cutting back see ACCC’s How to Save by Cutting Back tips.
3. Generate Cash – Are there household items or clothes you no longer need or wear? Gather these items and sell them to quickly boost your cash on hand and put it directly towards your emergency fund.
4. Set Achievable Milestones – Start with trying to set aside $100 for an emergency fund. Once this goal has been achieved, try challenging…