Less Than a Quarter of Women Have Made This Key Money Move During the Pandemic
- Having emergency savings is an essential part of securing your finances.
- While the pandemic drove some women to build that safety net, many still lack cash reserves.
Should you put it on your radar?
The COVID-19 pandemic has taught a lot of people some valuable lessons -- such as to be prepared for the unexpected. When the outbreak first erupted back in early 2020, millions of jobs were shed within weeks, and countless Americans instantly fell behind on their bills.
Those without money in savings no doubt struggled more so than their counterparts who had cash reserves to dip into. Now, in the wake of the pandemic, a lot of people are changing their approach to managing their finances.
In a recent Nationwide survey, 23% of women have built themselves an emergency fund in light of the events of the past two years. But that means most women haven't taken that step. And if you're part of that category, it's imperative you prioritize your emergency fund and make an effort to build it as quickly as possible.
You never know when an emergency will strike
When the pandemic first erupted, it caused an unprecedented unemployment crisis. Thankfully, lawmakers responded to it by dishing out stimulus aid and putting protections into place, like mortgage forbearance and eviction bans, to help struggling Americans avoid harsh consequences while getting back on their feet.
But the reality is that it doesn't take a global health crisis to create a scenario where your need for cash reserves is elevated. It's possible to lose your job out of the blue in the midst of a strong economy. Or, you could end up getting sick or injured, leaving you with a string of costly medical bills to pay while you happen to be out of work.
That's why it's so important to build yourself an emergency fund -- one with enough money to cover a minimum of three months of essential living expenses. Having those cash reserves could spare you a world of financial pain if your personal circumstances happen to take a turn for the worse.
How to build emergency savings
These days, it's hard to eke out money for savings, what with living costs being up across the board. But if your emergency fund is lacking or non-existent, then it's important to do what you can.
You can start by reviewing your current expenses and seeing if it's possible to cut back in any specific spending categories -- although if you're already living very frugally, it may not be. But if you have a habit of buying coffee every morning from the cafe around the corner or meeting friends for dinner at a restaurant twice a week, you may want to scale back in those areas.
You can also try boosting your income by getting yourself a side hustle. The gig economy is loaded with opportunities to secure an extra paycheck. And since that money won't be earmarked for existing bills, you should have no problem saving all of it (aside from what you owe the IRS for taxes, of course).
The fact that 23% of women have built emergency savings since the start of the pandemic is a positive thing -- for them, at least. But if you're among those who haven't taken steps to build cash reserves, then it's extremely important to make that effort. It may take time to complete your emergency fund, but the sooner you start, the better.
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