Emergency Savings are Fading

New studies show that people are saving less for emergencies.

Emergency Savings are Fading

According to new research, emergency savings accounts are dwindling. An annual study from the Consumer Federation of America (CFA) and the Employee Benefits Research Institute (EBRI) showed that two thirds of those surveyed reported having 'adequate' emergency funds, down from 71 percent in 2010. The New York Times reports that a separate study from Bankrate.com showed that a quarter of the respondents said that they had more credit card debt than emergency funds.

Still, despite the findings, we’re not going to be all doom and gloom. There was some good news to be gained from the CFA and EBRI study. Those surveyed saved more — for emergencies and general savings — when they had a goal in mind. This makes sense. It’s always easier to save when you’re working toward something specific, rather than just a general sense that you should be saving.

If you’re having trouble collecting funds for an emergency, try to formulate a goal, and then start small. Even a little cash can make a difference should you run into a situation you haven’t planned for, like expensive car repairs or replacing a fried computer.

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