Nearly 50% of Americans Don’t Have Enough Emergency Savings to Get Through COVID-19 Crisis
COVID-19 has sickened thousands of Americans and wreaked havoc on millions more. In fact, many states are reporting that their online job application filing systems are overloaded due to the massive increase in benefit claims in the past week alone.
It is for situations like these that having emergency savings becomes crucial. While unemployment benefits will put money in your pocket if you don’t have a job, they won’t replace your entire paycheck – not even. And if you are self-employed, you are out of luck, as self-employed people are usually not entitled to unemployment benefits.
Sadly, however, many Americans are unprepared to handle a crisis like the one we are experiencing. About 25% of American adults say they don’t have emergency savings at all, according to GOBankingRates, when more than 23% say they only have enough money to cover their bills for one to three weeks.
Meanwhile, 19% of Americans have enough money in the bank to pay two months of bills, and while that’s better than nothing, it might not be enough in this scenario. Many businesses that have been forced to shut down due to COVID-19 may not reopen, and if they do, they may fail to rehire all of their staff.
Point? Having an emergency fund is crucial, and while it may be too late to create one for the current crisis, you can commit to building up some cash reserves once things get back to normal and that you will have found your paycheck.
Building your safety net
If you are struggling with reduced income, now is not the time to build an emergency fund because you probably need all the money you can get to pay for the essentials and keep a roof over their heads. above your head. But once you are work again, get on a tight foot budget that limits your discretionary spending. This way you will have available money to put in the bank.
At the same time, consider getting a side job once it’s safer to get out and do it. Spending a few hours a week driving for a rideshare company or looking after other people’s pets could put a lot of money in your pocket.
How savings should we aim? The current crisis is proof that it is essential to have three to six months of essential living expenses in the bank. It is not a sum that you can find overnight, but if you work at it, you will get there on time.
The COVID-19 outbreak is unlike any scenario most of us have seen before, and we don’t yet know if it will lead to a real outbreak. recession. If you don’t have emergency savings right now, it doesn’t make sense to blame yourself for something that can’t be helped; it is not a productive use of your mental energy. But one thing you can to do is commit to building savings once things normalize so that the next time you find yourself in a crisis, whether personal or global, you’ll be ready.