If your refrigerator broke down today, would you have enough money to repair or replace it? What if your child needed new glasses because he broke them? Would you have enough dough in your rainy day fund to cover the cost? What if your car needed new tires?
Millions of Americans experience these things every single day. Many can afford it, while many can’t. This is the reality in the United States today.
According to a new survey by Bankrate.com, more than one-quarter (28 percent), or 66 million, of Americans have zero cash savings. They’re broke. They have nothing set aside for a rainy day.
The study discovered that 18 percent of respondents had less than three months worth of savings, while 16 percent had three to five months worth of saving. Twenty-eight percent reported having enough savings for a minimum of six months.
“Expenses grow faster than many Americans can save during the home-buying, family-raising years,” said Greg McBride, Bankrate.com’s chief financial analyst, in a statement. “Accumulating emergency savings requires establishing the habit.”
Researchers say the only positive thing coming from this report is the fact that fewer Americans are undergoing financial distress. The Financial Security Index (FSI) has remained in positive territory for 25 straight months – in June it touched 103.2.
Saving is “financial planning 101,” says Charlie Fitzgerald III, a CFP professional.
“To not have any reserves at all is the antithesis of financial planning,” says Fitzgerald. “It’s one of the first things when you’re sitting with a client for the first time, or even clients you’ve had for a while, you’re always wanting to see where, if you need money in a short-term fashion, where is it going to come from?”
Today, the national savings rate stands at just around five percent.
It is all in how you look at it. 72 percent have savings. I am 60 and never made more than $35,000 per year. Never had a savings account with more than a few hundred dollars in it. $25 balance, today. Raised 4 children, without government assistance and no emergency fund. I do 90 percent of my car and home repairs. I have a 701 credit score and access to $28,000 in credit, if needed. Living great in MT on a $20,000 pension and will start Social Security in 18 months at 62 and see a 66 percent increase in my monthly income. Planning ?????? When you do not have much money you cannot waste any of it on a financial planner. I have friends and family that have done very well, now in their 70’s and 80’s that never used any financial planner. Just started a business and worked hard.
A couple of my uncles were millionaires when they retired in the 1990’s.