Financial emergencies are bound to arise, yet most Americans do not have the necessary savings to handle these situations. When a financial shock happens to a family, it can take them months or longer to recover. Some never fully recover at all, as they live paycheck to paycheck with no extra cash available to help them get out of debt. Americans suffer an average $2,000 financial emergency. Having $2,000 in savings will help to combat this problem.
Health Care Costs
The most significant form of debt in the U.S. comes in the form of health care costs. People who suffer a medical emergency and need to stay in the hospital can expect to pay upwards of $2,000 out of pocket, even after insurance covers a portion of it. With the same amount in savings, you would be able to handle the costs efficiently. Without it, you would get stuck with medical bills and the interest they can accrue or drop in credit score they can cause.
All vehicles break down, no matter the make or model. Most even have multiple things go wrong in the same year. You typically spend a few hundred dollars for one simple repair. Have multiple repairs needed, and you’re looking at a hefty fee to get your car back into driving mode. Having a savings ensures you can pay for these repairs as soon as they’re needed.
You never know when a natural disaster will strike. You could get struck by a tornado, or hit by an earthquake. Even a significant amount of rain could lead to flooding and cause damage to your home. Having an emergency fund available ensures you can handle repairs and expenses when something like this occurs.
Natural disasters, vehicle repairs, and medical emergencies are all reasons you need a savings fund set up. Chances are, you’ll need extra money for one thing or another. Having a savings account with at least $2,000 at all times ensures you can handle emergency situations when they arise. Many Americans have no savings at all, leaving them to fend for themselves and struggle through these tough times as they arise. Start your savings today and be prepared for the unexpected, yet expected.