Many Florida residents and others around the nation maintain an emergency savings account to help them when unforeseen expenses occur. However, a financial services company recently reported that nearly half of all consumers have more credit card debt than money in their emergency funds. While roughly 17 percent of people in this country have no credit card debt, it was determined that they have no emergency account. Analysts are concerned that many in this situation face the real possibility of experiencing high-interest debt should an emergency occur.
It was recently reported that total household debt had grown to over $12.5 trillion. This total, just shy of its 2008 peak of $12.68 trillion, reflected the largest increase since 2013. Financial experts urge consumers to both pay down debt and build up an emergency fund.
It is important to be proactive in reducing the amount of debt, even if only small steps can be taken. Financial planners suggest looking for offers of zero percent balance transfer offers. When a transfer is not feasible, paying the balances as quickly as possible will ultimately save money in amount of interest paid.
Experts also recommend having accessible funds in the event of an unexpected need. While it’s important to take advantage of matching contributions from an employer to retirement accounts, it is worthwhile to consider a more short-term investment. The goal would be to have money available that would not require an early withdrawal penalty.
For many consumers, the idea of establishing an emergency fund may seem out of reach. They may be struggling with their financial situation and have a high level of credit card debt. A Florida bankruptcy attorney can help clients evaluate the situation and determine the appropriate course of action to get finances back on the right track.
Source: thestreet.com, “You Have More Credit Card Debt Than Emergency Savings“, Jason Notte, May 11, 2017