Posted on 04/23/2020 4:24:55 PM PDT by Enlightened1
The COVID-19 outbreak has spurred not just a health crisis, but also an economic one. With millions of Americans now out of work and countless small businesses shut down, a large number of U.S. adults are already scrambling to pay their bills.
While emergency savings can be a lifeline in situations like the one we're facing, 50% of Americans expect that their savings will run out by the end of April, according to a new survey by real estate service Clever. And given that the crisis is showing no signs of letting up in the near future, that's extremely troubling.
Unemployment claims have been reaching record highs as Americans scramble to put money in their pockets in the absence of a paycheck. But those benefits, even with the newly approved $600-a-week boost that came about in late March, may not suffice in helping those who are out of work pay their bills.
That's where emergency savings come in. Ideally, we're all supposed to have three to six months' worth of living expenses in the bank to prepare for situations like these. Yet 27% of those surveyed by Clever said they never had emergency savings to begin with, while 11% said they've already spent theirs. In fact, only 23% of respondents have enough money in the bank to cover six months of living expenses or more.
If you're out of work and don't have emergency savings, it's obviously too late to go back in time and build some. But what you should do is make establishing an emergency fund your first priority once things get back to normal. That way, if another crisis arises and you're unable to work for a period of time...
(Excerpt) Read more at fool.com ...
No debt and still transferring money into savings. But we have 2 retirement incomes and 2 SS checks coming in. My small biz is on hold but we’re just in wait mode.
They interviewed a lady niche gift shop, many cross over items same category as Walmart, but she gets warning then summons and fine.
Same complex with Walmart here, about 15 small businesses, including Hallmarks and Hobby Lobby. Closed except Walmart. Not right
Read about what happened to the pensions of Russians after the Soviet Union collapsed.
What the USSR didn’t have was the multitude of charity offered by every department of the government that we have. So might be interesting here.
Varsity Flight wrote:
“They interviewed a lady niche gift shop, many cross over items same category as Walmart, but she gets warning then summons and fine.”
Where?
Retired Military - From my new life, just got a bonus before Covid - still employed as essential. Wife, laid off. Daughter, working her ass off at a grocery store. Financially ok. Equity in the 200k range from my property.
No short term worries. Long term is different, however. I need answers. I need my company to survive this shit show. My middle daughter is slated for college this fall, and I’m trying to keep that aside.
The hit to our economy is misunderstood, at this point. There is damage, and it’s not like riding a bike. We’re back to training wheels.
Will we win? F::k yeah, we will. But, it’ll even out and we’ll be back to where we were, at least at some point.
China needs to be dealt with. Ignore her, or engage her, but enough is enough.
I have zero concerns personally. We are actually doing a lot better since they locked us down actually. We had plenty of money left over at the end of the month before the lockdown - but now - we have MUCH MUCH more left over....about 50% of our income. We are making all sorts of great new meals. It’s been very nice.
I am making furniture in our shop. Just sold a piece two days ago.
I am thinking of making some dignified affordable caskets for guys in the nearby veterans home.
I have a years worth on hand plus my new emergency 1200.
Cleveland, Dewine R still has shutdown order
Software Engineer and still working? That too can end. My son hires software consultants and has cut them all. Brother is one and just lost 2 accounts. Son starting ro get calls begging for work.
I was doing consulting for one firm and although they are still at full operations they cut me off expecting the worst.
Luckily I have savings and pensions, but then who will guarantee any investment if this goes on many months?
IF you are one who feels you have “made it”, you probably want to keep things locked down until the threat to your personal empire is eliminated. If you are still in the process of “making it”, as most small business people are, you consider the lockdowns an outrage.
“I’m a saver to a fault,”
I save, but would hate to dip into it, much less deplete it over a protracted Covid-quarantine and economic schism.
Back to work!
“That’s where emergency savings come in. Ideally, we’re all supposed to have three to six months’ worth of living expenses in the bank to prepare for situations like these. “
I would say a year. If you get laid off it can sometimes take a long time to get another job. This is just emergency savings. Then you should be saving 10-20% for retirement on top of that and not dip in that because you lost a job or get furloughed.
I always figured on 12 to 18 months of living expenses.
Right now I'd say I have 10 months of living expenses in liquid form (bank savings deposits) and another 5 in deposits that'll mature in 5 or so months. Not great, but I'm appalled that people don't have any emergency savings and only 23% have the 6 months savings.
well the states should cut their retirement monies - the load is too high. These need to be trimmed 50% or more.
Exactly - the states can’t afford the burden of the retirement amounts, especially that people are living longer. it’s time to raise the retirement age to 70 and also bring down the amounts
That will be hard for many people. When the sun was shining they were partying instead of making hay. People could have been living within their means and saved emergency funds before splurging on that giant TV or new car (I have never owned a new car) - why buy a 4 bedroom house when you have no kids, why send kids to a high cost university when they have bad grades, etc?
Minimizing the burn rate is too late for those folks. They need to sell off 80% of their stuff and eliminate, eliminate, eliminate — but no one is buying now. It is too late.
Save your money for a rainy day but use some of it to buy weapons and ammo, folks.
JoMa
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