Americans were recently asked about their savings accounts, and the results weren’t pretty.
A whopping 62% of Americans don’t even have $1000 in savings.
That’s just about equal to the average cost of rent in America. Yep–the majority of Americans are a single missed paycheck away from not being able to pay next month’s rent.
As such, this seems a good opportunity to relay the basics of the “rainy day fund.” The idea of the rainy day fund is to set aside enough cash to cover your basic expenses, were you to miss a month or two of income.
These savings can be a lifesaver for all sorts of reasons: being let go, facing unexpected bills due to health problems or a car accident, or being caught between paychecks while making a change of careers.
The rule of thumb varies depending on who you ask. Some say to save up one month’s income, others, six months, and others, an entire year. But judging from America’s survey results, perhaps you can start with $1000.
And to all you spenders out there, remember: you’re not robbing yourself of spending money when you save it. You’re just deferring spending so you can use it later.
Here’s another look at our chat with Biz Kid$ host Kaelon about the measures he’s taken to save big while living in one of the most expensive cities in the county: LA.