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Economic and financial circumstances can change in the blink of an eye. How can you be sure you have enough emergency savings to weather the storm? In this article, we’ll look at all the factors to make sure you’re prepared before you run into trouble.
According to a CNBC and Momentive survey, half of the Americans surveyed have no emergency savings at all. The same survey also found that 40% of those with exigency funds have less than $10K set aside.
As record-breaking inflation continues, those dollars are not going to get you as far as time goes on.
Well, it makes sense that before you go after it, you should determine the amount of emergency savings you need to feel secure and prepared.
Ultimately, if you are even thinking about whether or not you have enough emergency savings, you aren’t there yet.
How to Calculate “Enough” Reserves
Most financial experts will tell you a rule of thumb is to have enough saved to be able to pay three-to-six months of expenses should an emergency situation arise.
The problem is that this old maxim doesn’t hold up well against today’s economic challenges. The housing crisis and pandemic have taught us all that much.
For this reason, in addition to having enough to cover your expenses, you should also consider these questions:
After answering these questions, you will get a realistic picture of how much emergency savings you truly need. And more than likely, it’s more than you originally thought, which presents a new problem:
Emergency Savings and Financial Security
The fact of the matter is that if you’re focused on “emergency savings,” your mindset is in the wrong place when it comes to finances. Real financial stability and freedom means you are certain that you and your family would have enough to face any hardship.
The road to reaching that level of certainty is through investment in cash-flowing assets. (To learn how I do this with real estate, you can get my book, How To Create Wealth Investing In Real Estate FREE at grantcardone.com/freebooks/).
So stop thinking about saving. Earn more, put your money to work – and be great.
This content is intended to be used for educational and informational purposes only. Individual outcomes may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision.
A New York Times bestselling author, Cardone is the world’s No. 1 sales trainer and an internationally renowned speaker on leadership, real estate investing, entrepreneurship, social media and finance. His privately-held companies have annual revenues exceeding $100 million. Forbes named him No. 1 of the “25 Marketing Influencers to Watch in 2017.” He regularly appears on Fox News, Fox Business, and MSNBC and writes for Forbes, Success Magazine, Business Insider, CNBC, and Entrepreneur. He urges his followers and clients to make success their duty, responsibility and obligation. He currently resides in South Florida with his wife and two daughters.
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