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No Emergency Savings?! How to Prepare for a Rainy Day

Posted by McDonald & Osborne Posted on Oct 12 2015

“Nearly three in ten Americans have no money saved for a financial emergency,” according to a recent Bankrate.com survey. For the mathematically challenged, that’s 30 percent! Living paycheck to paycheck can spell disaster if you get hit with large unexpected expenses (i.e., hospital stay) or suddenly lose your job.

Yahoo! Finance’s Daily Ticker Video shares an interview with Mvelopes CEO, Steven Smith in which Smith suggests a 5-step plan for building emergency savings quickly.

  1. Define “emergency” and determine how much you need to set aside
  2. Stop overspending by using an envelope budgeting system
  3. Cut back on discretionary spending
  4. Eliminate late payments and overdraft fees
  5. Reallocate extra debt payments and 401(k) funding to emergency funds

Mvelopes is a free on-line budgeting tool that you may find to be very useful. We also suggest you check out DaveRamsey.com for more tips on emergency funds and savings. Dave Ramsey is a personal finance guru that has become famous for his step-by-step guide to becoming debt free.

It is always tough to deal with emergency expenses, and they always seem to hit when least expected. But we guarantee, having the funds available to pay for these surprises as they arise will make life much easier for you and your family.

Stephen Osborne
Accountant
sosborne@mo-cpa.com

Photo Credit: BigStockPhoto.com