This Is Now the Most Important Financial Goal for Women—And There's a Sane Way to Achieve It
A new survey from Meredith Corp. reveals the most important money goals for women across America.
Of the major financial goals on the table, women most want to be prepared for an emergency.
That’s the finding from a new survey from Meredith (Millie’s parent company), which asked women what their top financial goals were. No. 1 on the list was saving for an emergency fund, with 75% of women saying that the goal was either extremely or very important to them. That’s followed by paying off household debt (67%) and saving for retirement (67%), the survey, entitled “Meredith Consumer Connections: Personal Finance 2020” found.
Plus other great insider savings tips.
Though women want to have emergency savings, the reality is that many don’t have enough. More than 4 in 10 Americans say they’re uncomfortable with the amount of emergency savings they have.
Some women, of course, are still without jobs and can’t build up much of a cushion because of that. But for others, this may be a solid time to get to work on that goal. With so many of us working from home and not going out as much, “this may be a time you can better do this because you have less discretionary spending,” says certified financial planner Bobbi Rebell, a personal finance advisor at Splitit.
So how exactly do you go about building up emergency savings—without stressing yourself out too much? Here’s what experts have to say on the topic.
Approach emergency saving with mini goals. Most experts recommend you save roughly 6-9 months worth of expenses in your emergency fund, but that number can be daunting. So daunting, in fact, that it can make some people not do anything. “Focus on something smaller first—one week of expenses in your emergency fund—just to get that small momentum going,” says Kevin Mahoney, a certified financial planner and founder of Illumint. Then aim for two weeks, three weeks, and keep going from there, he adds.
Understand what constitutes a true emergency. Mahoney explains that you may not need “6-9 months of expenses” in the traditional sense, because if there was an emergency, you’d probably pare down your expenses immensely to just focus on essentials. So, figure out your “true emergency expenses” each month and aim to save 6-9 months of those expenses instead.
Reframe what the “emergency fund” is for. It’s easier to save if you “feel like you aren’t just saving for some ambiguous crisis,” says Mahoney. Instead, think of this money in a more positive light: It could be your “pursue other career options” fund, so if you were to lose your job, you could survive for months without having to immediately take another job you didn’t want, for example.
Make it automatic. You’ve heard this advice before, but it’s absolutely worth repeating. “Set up an automatic savings plan,” says Rebell. Have a small amount of money withdrawn from each paycheck and move it automatically into your savings account. That is a simple way to ensure you’re regularly saving.
Don’t panic if you don’t have enough in emergency savings. Yes, it’s important to have them, but Rebell notes that you should also think about your “emergency plan”—in a true emergency what you would actually do to save money. “Get roommates. Sublet a room. Move home. Break your lease. Sell stuff. Basically a firedrill for getting to the point where you don’t have the cash you wish you could have saved,” she explains. “Life happens,” she adds, noting that “we need to get away from absolute rules and the blame game.”