I read an alarming statistic today over at The Crux about the state of savings in America. Much is made about our collective debt, but we rarely hear much about our collective savings. Unfortunately, it seems that is because we have so little squirreled away for that proverbial rainy day.
“According to a telephone survey from the nonprofit Employee Benefit Research Institute and the market-research company Greenwald and Associates, 36% of American workers have less than $1,000 in savings.”
Depending on your own financial situation, you may find the subjects of that survey rather foolish for keeping so little in the bank. On the other hand, if you have ever lived paycheck to paycheck, you know just what it’s like to not have any extra for savings, much less a $1,000.
Maintaining a basic emergency fund is essential to financial well-being, and we must, as a society save and invest more for both our long-term and short-term needs. If you find yourself in the 64% of people without $1,000 in the bank, start saving a small amount each paycheck – even $20 adds up over time.
The next time you receive a raise at work aim to put half of the percentage increase in savings. You will still enjoy a modest increase to your paycheck, and you will be putting a little distance between you and the next inevitable emergency.