Here's how to make your financial resolutions a reality in 2020.
Life happens — the water heater goes, you need some new tires or someone in the family gets sick — and when it does, there can be unexpected bills to pay. A rainy-day fund is the buffer that lets you pay emergency bills without going into debt.
"Our surveys show that people tend to incur an emergency expense that's unplanned every 24 months or so,"said Greg McBride, chief financial analyst at Bankrate.com."And when it happens, it tends to average around $1,500. So you have to be prepared."found that 60 percent of U.S. households don't have enough saved to cover a $1,000 emergency. A third would need to borrow the money in some way, such as from a credit card or a personal loan or from family or friends.
Rather than waiting until the end of the month to see whether there's any money left to put into your emergency savings account, do the savings first, he said. Automate the process, so you don't have to think about it. "I always find that those who make it automatic tend to do better than those who don't," Frankel said."Instead of saying, 'I'm going to save the $50 out of every paycheck,' set up a deduction plan at work — it will greatly increase your odds of success."
It's best to open a separate account for your emergency fund so you're not tempted to use it for daily expenses. Consider keeping the money in a high-interest online savings account. They pay significantly more than a traditional savings account, and they tend to have no or low fees.
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