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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.
Star of Discovery Channel’s “Undercover Billionaire,” Grant owns and operates seven privately held companies and a private equity real estate firm, Cardone Capital, with a multifamily portfolio of assets under management valued at over $4 billion. He is world’s Top Crowdfunder, raising over $900 million in equity via social media. Known internationally as the leading expert on sales, marketing and scaling businesses, Cardone is a New York Times bestselling author of 11 business books, including The 10X Rule, which led to establishing the 10X Global Movement and the 10X Growth Conference, now the world’s largest business and entrepreneur conference. The online Cardone University, serves over 411,000 individuals and Forbes 100 corporate clients throughout the world. Voted the top Marketing Influencer to watch by Forbes, Cardone uses his massive 15 million + following to give back via his Grant Cardone Foundation, a non-profit dedicated to mentoring underserved, at-risk adolescents in financial literacy, especially those without father figures.
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