After the downturn, do you still have an emergency cash fund?
If the world were designed by economists and advisors, everything would be covered under the umbrella of “good financial sense.”
But the recession kind of acted like a big RESET button, not necessarily changing what we view as responsible consumerism but shuffling what we’re able to do about it. Now we might put down just 10 per cent on a home. Now we might have to push that retirement date by a couple of years.
Perhaps the first thing the downturn eliminated, though, was the emergency fund, which is a key staple of “good financial sense” but something nearly half of Canadians today don’t have.
A new poll from CIBC shows that 45 per cent of Canadians have no emergency savings.
According to the survey, 40 per cent of 45-to-64-year-olds don’t have cash for the unexpected, while nearly half (49 per cent) of 18-to-44-year-olds admitted the same.
Most said that, should a crisis arise, they’d have to dip into their retirement savings or take on debt to cover themselves.
This, of course, should be no surprise. In a world still short on cash, the first things to go are those on the fringe. Emergency funds are a nice safety net for tomorrow, but if they’re not paying the bills today, they’re expendable to many in certain economic climates.
Still, what Canadians have to remember is an emergency fund, unlike retirement, which might require more than a million bucks total, doesn’t have to be daunting.
You only need three months income for a proper emergency fund to cover unexpected health problems or car trouble or home repairs.
That’s all it takes to get back under the umbrella.
By Jason Buckland, MSN Money