America’s workers are hitting new highs with credit card debt, which has reached $1.13 trillion as of early 2024. The reasons? Inflation and rising interest rates have pushed many to lean more on their credit cards for daily expenses. This situation highlights the importance of having an emergency fund. Francis Financial Planners suggest having savings that can cover three to six months of expenses to avoid falling into the high-interest debt trap during unexpected events. By building and maintaining an emergency fund, you can achieve financial stability and avoid accumulating long-term debt.
Here are some tips to start building your emergency fund. First, determine how much you need to save, aiming for at least three to six months of living expenses. Track your income and expenses to identify this amount and to find areas where you can cut back and save more. Set up automatic transfers to your savings account to ensure consistent contributions. Direct any unexpected money, such as tax refunds or bonuses, into your emergency fund. Store your emergency fund in a separate, easily accessible account, like a high-yield savings account, to avoid the temptation of spending it.
If you are ready to take control of your financial future and want personalized guidance, book a financial planning session through your participant portal or the Francis LLC app which can be found on the Apple app and Google play store or give us a call at 866-232-6457.
