If you are under-saved, you are not alone. A new poll just released by GOBankingRates.com and The Penny Hoarder unearths a startling statistic:
73 percent of Americans have under $1,000 saved -- or don't have a savings account at all. Some additional findings:
Less than 14 percent of respondents have $10,000 or more saved.
Men are better savers than women; 33 percent of men versus 24.6 percent of women have savings of at least $1,000.
Generally, the more a person makes, the larger his savings account is.
Surprised? If you think about it, this goes hand and hand with the enormous amounts of credit card debt we see in this country. Everyone will experience at some point in their lives an unexpected expense. Most people are under-saved with an inadequate amount of money put back for emergencies. Thus, that expense goes on the credit card.
So, how do you create an emergency account when you haven’t been saving at all? Stop saving for the long-term if you haven’t prepared for the short-term. By writing that I might have just committed a cardinal sin. What do you mean stop putting money in your 401 K plan? We are always taught to save for retirement.
Think through this for a minute. Why save for the long-term when the short-term is exposed to liability? You could have hundreds of thousands of dollars locked up for the long-term. However, if a short-term emergency occurred without an emergency back-up plan, that long-term money does nothing for you.
Grant it there is nothing exciting about saving money in a savings account that earns .0010%. However, it beats accumulating debt. Emergencies will happen. Taking a year or two off from long-term savings in order to fund an emergency account could make a lot of sense.
For more information on the GOBankingRates.com, http://www.gobankingrates.com/savings-account/your-brain-wont-let-you-save-money/.