CHARLESTON, W. VA - We all want to save money but, while the economy has been improving since the recession five years ago, most Americans would not be prepared if a similar economic situation would arise.
That’s according to a study conducted by NeighborWorks America, a group which aims to educate people on community development and affordable housing among other things.
Jayna Bower, senior director for NeighborWorks America, recently told MetroNews current saving habits leave many unprepared for financial hardships.
“Fifty-three million adults only have enough savings to tide them over for a month,” Bower said. That works out to about 22 percent. “Nearly a third, 70 million, don’t have any savings that would allow them to respond to an unanticipated crisis, much less work toward a desired goal.”
The survey also revealed that people in certain groups were saving less than others.
Fifty-two percent of households making less than $40,000 per year, 43 percent of African American and Hispanic households and 38 percent of those under the age of 30 were among those with the least amount of money in the bank.
Bower recommended putting back at least three months worth of salary into savings. However, she said, to be cautious, the amount should be more. “To really be on the safe side, that could be as much as six months in case of unforeseen crisis such as a medical emergency or job loss,” she said.
According to Bower, the first step towards being prepared financially is creating a strict budget based on one’s income. For those without knowledge in finance, NeighborWorks America’s locations in Charleston and Elkins offer assistance to residents and make recommendations for those not living near those areas.
“These are many times no cost or low cost services that really help individuals take a close look at how much are you bringing in each month and what are you spending your money on,” Bower said
Once you can determine what your expenses are, Bower said you can then find areas where a change can be made to save money. These changes can range from watching utility use to simply adjusting a morning routine.
“If on a daily basis you stop to get a cup of coffee in the morning on your way to wherever you’re going, instead of getting a large, if you ordered a medium you might save 50 cents on that cup of coffee,” Bower said. “Surprisingly, that 50 cents would equal about $15 dollars a month or about $180 a year.”
More information on NeighborWorks America is available at www.nw.org.