According to experts, having an emergency savings fund is a must if you want to be able to weather an unexpected financial blow.
Many people are falling short.
A Bankrate study found that only 44% of people are prepared to pay for an expense with cash. A third of people would need to borrow money.
Ted Jenkin, CEO at Atlanta-based Oxygen Financial, said that the ideal number is three to six months worth of living expenses. If you are more conservative, you may want to take a year off.
In an uncertain economy and amid high inflation, finding extra income may be a challenge.
Changing how you handle your resources may allow you to set more cash aside.
Big savings can be found by reexamining your day-to-day expenses.
Jenkin, who co-wrote a book called The 21-Day Budget Cleanse, recommends people take a cleanse.
If you have a lot of large bills, try to shop around or change them.
Most people really haven't taken the time to see where they're overspending.
Take your internet, phone and cable bill. If there is an opportunity for a better package or rate, ask your provider. Look at the other options available through other companies.
Jenkin said that most people haven't taken the time to see where they're overspending and what the difference is.
If you are not careful, credit card balances can cost you 20%.
Unless you are a business owner, you do not need more than two credit cards.
Jenkin recommends cutting up your cards until there are only two left.
If you can turn your rewards into extra funds, then you have done your job.
That could include an Amazon gift card or points. During the coronaviruses, many people have unused perks.
Jenkin said that people are not looking at it.
Even with interest rates still at record lows, a savings account at an online or local community bank is the best place to make sure you can access the money when you need it.
If you lose your job or start a business, you will want quick access to your cash.
It is not possible to put it into the stock market over a period of three or six months.
If you haven't used something in a year, it's time to sell it.
If you haven't worn a shirt in a year, you can sell it on a website. You can sell your electronics on sites such as Decluttr and Facebook.
There are many websites and apps that sell your stuff.
If you don't want to part with an item forever, you may want to consider renting it out on a website like Turo.
Jenkin said that you can also sell your skills if you want to generate more money.
You can list your services on websites that will allow you to make more money.
If you have a hustle, skill or talent, Jenkin said to earn that extra income to build up a cash reserve.
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