Struggling to save money? Follow these three steps to build your nest egg

BOSTON — Ellery Harvey is almost 40 years old, works multiple jobs, and can’t seem to save any money.

“I’m one emergency away from total bankruptcy at all times,” Harvey said. “I make good money, too. I’ve got a good job but it’s too expensive to live in the city.”

Harvey is not alone. Bankrate’s 2024 emergency savings report found more than half the country doesn’t have enough money saved to pay for a $1,000 emergency expense.

“We need to do better in terms of saving for emergencies,” said Mark Hamrick, Senior Economic Analyst at Bankrate. “What this really spotlights is the high degree of financial fragility in this country.”

Bankrate surveyed more than a thousand U.S. adults and found only 44 percent could use savings to pay for a $1,000 emergency expense. 35 percent told Bankrate they would have to borrow money, either by using a credit card, taking out a personal loan, or asking friends or family for help.

“You don’t have to start [saving] big, but you have to start,” Hamrick said.

FIGURE OUT HOW MUCH YOU NEED

Bankrate says most experts recommend saving three to six months of expenses. If your monthly bills total $2,000, your goal over time should be to save at least $6,000.

“This is not a concrete rule,” according to Bankrate. “You may need to save more if you are self-employed and anticipate a lean month, or if you are preparing for economic hardship, such as a hiring slowdown or a recession.”

OPEN A SEPARATE ACCOUNT

An online savings account or money market account can allow you to sock away emergency funds.

“This is an opportune time to really take advantage of the superior yields on savings that are part of the equation of a higher interest rate environment,” Hamrick said.

MAKE A NEW BUDGET AROUND SAVING

Cut out unnecessary expenses and stick to good spending habits. If you use direct deposit to get paid, Hamrick recommends sending a portion of your paycheck directly to your savings account.

“If you pay yourself first, then you will have that money to use for whatever purpose, including an emergency expense of $1,000 or more,” Hamrick said.

Harvey said if he’s ever hit with a sudden $1,000 expense, he’ll probably have to ask his family for help.

“Yeah, it’s a nightmare. It’s an absolute nightmare. That’s living in Boston. It’s just too expensive here,” Harvey said.

This is a developing story. Check back for updates as more information becomes available.

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