Strengthen Your Financial Resilience With These 3 Insights
BY SEAN PYLES
When your finances are strained, making smart money decisions is crucial. To better handle current conditions, ask yourself these three questions.
HOW MUCH OF AN EMERGENCY FUND IS NECESSARY? THE ANSWER.
Even a few hundred dollars can protect you. Don’t be daunted if you have no emergency cushion or it feels very slim. “Families with a savings cushion of $250 to $749 are less likely to be evicted, receive public benefits and miss a bill after a job loss,” says Signe-Mary McKernan, a vice president at the Urban Institute. Research by that Washington, D.C., think tank found that less than $1,000 is enough to help families weather a financial crisis. “Even small amounts of savings can make a difference, and we find that low-income families with savings are more resilient than middle-income families with no savings,” McKernan says. WHAT YOU CAN DO With more uncertainty ahead, dig into your budget and make cuts so you can shore up savings. McKernan suggests setting up automatic savings from your paycheck – even as little as 2% will add up over time – and saving any windfalls like a tax refund or bonus.
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