Monday, February 22nd, starts America Saves Week. This past year has hit a lot of families hard financially, emphasizing the fact that having a healthy amount of money saved is crucial to getting through an emergency. How much should you have saved? A good rule of thumb is to save 3-6 months worth of expenses. If it costs $3000 a month to run your household (groceries, house payment, car payment, car insurance, etc.), then you should have between $9,000-$18,000 saved.
If you were to lose your job, think about how in-demand your career is: if you can easily get a new job in a short amount of time, you can likely be okay on the lower range (3 months). Covid made us realize that nothing is certain, and having money saved to weather this storm (or any storm—medical diagnosis, loss of spouse, etc.) brings relief in difficult situations.
If your monthly expenses include debt payments, imagine how much faster your emergency fund could be built if you didn’t have to pay a student loan or credit card bill every month! Debt creates a strain in your budget and delays reaching financial goals.
Do you know how much debt you have? Many people don’t even know the grand total. Once you find this number, create a budget (either on Excel or through numerous apps) and go over how much money per month you are spending on debt payments as well as regular expenses like car insurance and groceries. A budget will help you create a plan to tackle your debts and let you see a timeline to get them paid off.
If you need help creating a budget, saving, or creating a plan to reduce debt, UF Extension can help. We are offering free financial counseling classes for residents across the state of Florida. Please register here to be matched with a counselor: https://ufl.qualtrics.com/jfe/form/SV_6gtB5ixt5oIYDrv