America Saves Week is coming February 24th - March 1st! If you don't have any savings, you are not alone. Millions of other Americans who also don't. See why this is problematic:
What if you have an emergency?
Many people have no emergency savings, therefore end up using credit cards to cover emergencies. A true emergency will be different for each of us, but for me, it was covering a recent life-saving surgery for my dog. It's also been used for a transmission that failed. It's also been used for new brakes. I've had to stop my debt snowball many times to replenish the emergency savings - but it was there so that I didn't have to go into debt to cover my emergency.
Do you live paycheck to paycheck?
Not having any money in savings means that many turn to payday loans in order to pay their bills. Rare are the folks that take out just one payday loan. It begins a vicious cycle of borrowing from Peter to pay Paul. Start small - set an amount in your budget that you can set aside in a rainy day fund, and you'll eventually build that up. Not to mention that if you are not saving now - how will you ever plan to retire?
What would happen if you became disabled or lost your job?
Do you know how you would pay your rent or mortgage if you lost your job or became unable to work due to an accident or disability? What about paying for your lights and water? What about buying groceries? Most people don't think job loss or disability is going to happen to them. It happens. If it happens to you, be prepared.
How much should I be saving?
If you are a little on the geeky side as I am, I love a good Excel spreadsheet. The fine folks at Vertex42 have made every kind of spreadsheet you can imagine, and I often use their spreadsheets for my planning. They have tools to help you keep track of your budget, and tools to help you determine how much to save.
If you have no savings as of today - start with an emergency fund. $500 - $1000 is best. If you find the thought of savings a very unrealistic task, start with $500.
How do I get started?
First things first - you must spend less than you earn, period. If you are spending more than you earn (borrowing from others or using credit cards), you must fix that problem before you can begin to save. Does it mean taking on a part-time job? Looking for a higher paying job? Cutting out expenses? You can only impact your budget in two ways: Earn more or Spend less.
Bonus: Are you getting a tax refund? If yes - save some!