Saving: The Key to Avoiding Financial Disaster in the Face of Unexpected Expenses

GAITHERSBURG, Maryland – A recent Bankrate survey found that only 44% of Americans could pay for an unexpected $1,000 expense with their savings. This highlights the fact that many people are not prepared for emergency financial situations, a phenomenon supported by the insights of financial planners and experts in behavioral finance.
Brad Klontz, a certified financial planner and expert in financial psychology, emphasized the importance of saving, stating that Americans should aim to set aside at least three to six months’ worth of living expenses in case of an abrupt change in income or unforeseen events. However, he acknowledges the challenge of changing spending habits and the difficulties of saving, especially for those who already feel financially stretched.
These insights from financial advisors shed light on the struggles and barriers many Americans face in building up their savings. Marguerita Cheng, a CFP and CEO of Blue Ocean Global Wealth, suggests focusing on building a savings habit by starting with small amounts and gradually increasing contributions as other financial obligations are met. Additionally, she emphasizes the importance of cutting back on discretionary spending to free up more money for savings.
Cameron Valadez, a partner at Planable Wealth, in Riverside, California, underscores the potential for savings by reconsidering insurance policies and adjusting deductibles to reduce monthly payments. These insights provide valuable tips and strategies for individuals looking to improve their financial preparedness and build a safety net for unexpected expenses.