Page 49 - Book10E

According to America Saves, a nationwide coalition of nonprofit, cor- porate, and government agencies that helps individuals and families save and build wealth, building an emergency savings fund may spell the difference between those who manage to stay afloat and those who are struggling financially. That’s because maintaining emergency sav- ings of $500 to $1,000 at a minimum allows you to meet unexpected financial needs more easily. Examples include:
• repairing the brakes on your car
• buying your child a new pair of needed shoes
• replacing a broken window in your house
• paying for a visit to the doctor when your child has the flu
• covering the dental expense of filling a painful cavity
• paying for a parking ticket; or
• flying to visit a sick parent
An emergency fund not only enables you to cover these expenses more easily, it also gives you the confidence and peace of mind that you can cope with these types of financial
emergencies. Not having an emergency
savings fund is an important reason that many individuals borrow too much money at high interest rates. For exam- ple, with emergency savings, Americans probably would not have to take out $2 billion a year in payday loans at interest rates that average 300% to 500%.
As reported by the Consumer Federation
of America in a news release dated April 27, 2005, the results of a nationwide survey indicated that a lack of personal savings to cover periodic emergency expenditures was a principal cause of financial worry among women, especially younger women. This has resulted
Unexpected Expenses 39
I don’t want expensive gifts. I don’t want to be bought.
I have everything I want.
I just want someone to be there for me, to make me feel safe and secure.
—Diana, Princess of Wales