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COVID-19 stresses importance of emergency funds

(AP Photo/Elise Amendola)
Published: Jul. 31, 2020 at 7:20 PM CDT
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TOPEKA, Kan. (WIBW) - The ongoing COVID-19 pandemic has highlighted the importance of keeping a pile of emergency funds.

TopCashback.com, a U.S. based cashback site, says almost 31% of Americans have dipped into their emergency saving over the past six months due to the ongoing COVID-19 pandemic.

The cashback site says it surveyed 906 adults all aged over 18 to find out more about Americans’ financial feelings.

TopCashback says it found that 61% of Americans felt financially confident, however, 34% still occasionally stress over money.

The site says it also found that 53% of the U.S. has an emergency fund, and 61% say their emergency stockpile could cover at least six months of living expenses. It says the COVID-19 pandemic has 31% of Americans dipping into these emergency funds.

In response to the COVID-19 pandemic, TopCashback’s Personal Finance Expert, Rebecca Gramuglia has the following tips:

  • Revisit your budget. If you find yourself overspending or using your emergency savings, try implementing the 50/20/30 rule. Make sure your adjusted budget covers essentials, financial priorities and all of your wants. This rule requires you to spend only up to 50 percent of your after-tax income on essentials, such as housing and food; 20 percent on financial priorities such as debt repayments and savings; and 30 percent on your wants; such as splurges. However, if you find yourself needing to save more, consider switching the latter two percentages. Another way to view the 50/20/30 rule is as the Needs/Savings/Wants rule.
  • Be mindful of spending habits. While many are still doing a large majority of shopping online, be sure to look for ways to save. If you find yourself paying for shipping, see if you can score in-store pickup to eliminate extra costs. Plus, be on the lookout for ways to save by shopping sales, using coupons and shopping through a cashback site like TopCashback.com to earn a percentage of your purchase back in cashback.
  • Look for ways to lower your bills. Do a subscription cleanse or deactivate any duplicate accounts to cut costs and save money. Subscriptions include newspapers, streaming, food services and more. It’s easy to sign up for these services during a free trial, but sometimes we forget to opt out before paying. And don’t forget to review all additional expenses like cable and/or internet to negotiate to lower your bill. Any money you “save” by cutting costs can go towards an emergency savings fund.

For more information on the study visit TopCashback.com.

Copyright 2020 WIBW. All rights reserved.

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