Setting aside money for an emergency fund is the best way Millennials can protect themselves should one occur.
One of the most effective ways Millennials can protect themselves from a financial crisis is to have an emergency fund in place. In order to prevent Millennials from getting caught off guard due to unexpected expenses, national nonprofit American Consumer Credit Counseling has provided emergency savings starter tips.
“Unfortunately, it’s easy to fall behind on bills if confronted with an unexpected expense, whether it be medical, a major housing or car repair or some other emergency,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “Setting aside money for an emergency fund is the best way Millennials can protect themselves should one occur. An emergency fund should be enough to cover three to six months of expenses.”
According to a new survey by [Earnest, Amino and Ipsos, 68 percent of Millennials could cover $500 in an emergency without falling into debt, compared to the 43 percent of Americans in other age categories who say the same.
American Consumer Credit Counseling provides Millennials with important tips on how to budget for emergencies:
1. Start small – Millennials should take a look at their budget and figure out a realistic amount of money that can be set aside into their emergency fund. Do not forget to include it as a “new expense” in your budget. Whether it be $10 a day or $10 a week, it is important for Millennials to start with an amount their budget can handle.
2. Reduce Spending – Are there specific areas you can cut back? Some ways Millennials can save on everyday expenses include making meals at home, remembering to turn off the lights, and reducing their cable subscription. For more tips on cutting back see ACCC’s How to Save by Cutting Back tips.
3. Generate Cash – Are there household items or clothes you no longer need or wear? Gather these items and sell them to quickly boost your cash on hand and put it directly towards your emergency fund.
4. Set Achievable Milestones – Start with trying to set aside $100 for an emergency fund. Once this goal has been achieved, try challenging yourself more by setting aside $300 or $500. Continue increasing the target amounts until you have enough set aside to cover a few months worth of expenses.
5. Automatic Payments – Once you have enough saved to house your emergency fund in its own account, set up automatic transfers so you are constantly contributing to ensure steady growth.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at http://www.ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx
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