Our previous article was about how to get a second mortgage, but this is hardly possible if you have bad spending habits. Some things have to be changed once and for all. What would you do if your washing machine breaks, you have to visit a veterinary because your pet needs help and that happens on the same day?
We became used to planning our time and planning our budget. Sure enough, you know that unexpected expenses always occur when we are not ready, but only a few of us include them in the budget and stash money in savings on a weekly/monthly basis. According to a survey by Princeton Survey Research Associates International, two in three Americans do not have enough savings to deal with unforeseen expenses at the rate of about $1,000.
The Study Reports
In December 2015 they interviewed 1,000 people and figured out that only 37% of respondents have enough money to cover unforeseen expenditures. 23% would cut their purchases to make both ends meet, 15% would turn to credit cards and the last 15% would borrow money from family or friends.
In fact, the unforeseen expense may occur in regular or predictable time intervals when nobody expects it to happen. It is important to have money for such emergencies and remain financially unscathed. Personal Money Service offers a personal loan, which helps contend with emergencies and upon favorable terms.
The Income Matters
As the survey reports, families with higher income prefer relying on savings for unexpected situations. Nearly 54% of respondents replied that they would pay the cash. About 23% of Americans with annual income less than $30,000 said they would take advantage of savings. 9% of respondents (with the same annual earnest level) answered they do not know how to pay for unbudgeted expenses.
Bonus article: How to Manage Money When Your Income is Unstable?
Also, the answers of millennials have changed: in 2014, 31% of young people said they would rather reduce the spending (learn how to cut food spending). In 2015, more than 34% answered that they would make and use savings. 12% of young Americans replied that they would use a credit card and 31% said they would need to lower spending.
Also read: Change Your Life by Spending Less.
Boost Savings By Reducing Spending
Some people do not know that restaurant meals, alcohol, expenses on cellphone and cable TV can be budget-busting factors. It is necessary to refuse from the highest-cost items and think which expenses are negotiable and which are mandatory. By the way, 58% are likely to reduce their spending on restaurant meals and 35% – on alcohol.
The funny thing is that many young respondents say they do not plan to budge on cellphones. Your smartphone may be vital to you, but do not take whatever the phone company offers you by default; one should have the right plan for the usage and his needs.