Economic and financial circumstances can change in the blink of an eye. How can you be sure you have enough emergency savings to weather the storm? In this article, we’ll look at all the factors to make sure you’re prepared before you run into trouble.
According to a CNBC and Momentive Survey, half of the American surveyed have no emergency savings at all.
The same survey also found that 40% of those with exigency funds have less than $10K set aside.
As record-breaking inflation continues, those dollars are not going to get you as far as time goes on.
SO WHAT CAN YOU DO?
Well, it makes sense that you should determine how much you need in emergency savings before you go after it…
How to Calculate “Enough” Reserves
A rule of thumb most financial experts will tell you is to have three to six months of expenses saved for an emergency.
THE PROBLEM IS THIS OLD MAXIM DOESN’T HOLD UP WELL AGAINST TODAY’S CHALLENGES.
The housing crisis and pandemic have taught us all that much…
For that reason, in addition to your expenses, you should also consider these questions:
- Do you earn a salary or does your take-home fluctuate?
- Is all of your income earned or is some of it passive income?
- What expenses could you cut immediately in an emergency?
- Where can you cut spending now to put toward the future?
After answering these questions, you will get a realistic picture of how much emergency savings you truly need. And more than likely, it’s more than you originally thought, which presents a new problem…
How can you get more money?
Emergency Savings and Financial Security
The fact of the matter is that if you’re focused on “emergency savings,” your mindset is in the wrong place when it comes to finances.
Real financial stability and freedom means that you would know that you and your family would have enough for any hardship.
The road to that certainty is investing in cash-flowing assets.
I am doing a FREE training on how I do this with real estate, and all the tools to get started.
You can register for the Live Real Estate training here.
Ultimately, if you are even thinking about if you have enough emergency savings, you aren’t there yet. So stop thinking about saving.
Earn more, put your money to work, and be great.
— Grant Cardone
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