Far too few Americans have enough savings to help them cover the costs of their basic expenses if there is an unexpected interruption to their income.
Financial experts, like Gary Shaffer, Regional Director of Comerica Bank in North Texas, stress that saving money does not have to be stressful.
“Start small. It adds up,” Shaffer said.
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Shaffer advised setting reachable goals - $1,000 to start, then one month’s expenses, then more.
“What we want to get to, a comfortable level, is maybe we have six months now saved up,” Shaffer said. “We’ve got a really nice cushion. We are not stressing about the day-to-day paycheck coming in, how am I going to pay for my bills, my expenses? I have got a cushion. If a small emergency happens I’m in pretty good shape.”
Based upon the results of a Bankrate.com survey, as many as 1 in 5 Americans do not have any savings, according to a report by CNBC. And of those who do save, around 1 in 5 only save 5 percent or less of their income.
Once people start to feel comfortable with their level of savings, Shaffer encouraged people to invest as much money as they comfortably can, saying that “time in the market” is key.
A ‘for instance’ Shaffer offered – someone who is 18 years from retirement and has $100,000 to invest can reasonably expect their money to double in around 9 years. That means $100,000 would become $200,000 in 9 years and $400,000 by the time they retire.