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If an unexpected bill arrived today, would you have the money spare to cover it? Despite living in what is probably the wealthiest nation in history, Americans still struggle to get by. Nearlysix in 10 don’t have enough savingsto cover an unexpected $500 bill, according to a Bankrate report. In fact, just 41% of adults said they had enough savings to cover an unplanned expense. In real terms, over half of the households in the U.S. have less than one month’s worth of income readily available to use in emergencies, says the Pew Charitable Trust.
Savings are slightly up on previous years
Although these figures may look shocking, there is some evidence that slightly more people are now making the effort to save, compared to previous years. This may be largely to do with the financial climate, with many people being shocked into addressing their own financial situation when the economy crashed almost a decade ago. It seems that lessons have been learned to some extent, but there is still a long way to go.
Making the most of savings
If you have money to save, then it is important that it is kept in a way that is the most financially beneficial for you. If you have some cash to deposit, finding out how to choose the best money market accounts could be a great option. Although you will have to put more in there, there are usually much more attractive rates of interest, meaning that you will get more for your money as the months and years tick by. There won’t be any kind of penalties if you need to get at your money, which means that there are no worries about unexpected bills.
Looking to the future
Putting aside thoughts of unexpected bills in the near future, attentions should turn towards retirement. A recent study showed that 46% of Americans have less than $10,000 to their name when they die. But perhaps even more worrying, almost half of American households have no retirement savings at all. This might be because so many people feel that they should “live for the moment”, putting considerations of retirement to the back of their mind. But with no savings in place, or retirement plan, what happens when there’s unexpected medical bills to pay for?
When you consider the fact that people are living longer than ever before – stretching retirement out even longer than before – it is incredibly important to think about saving. It’s much better to do so now before it is too late.