Summary
If you aren’t working toward anything specific, you’re likely to spend more than you should. You’ll then come up short when you need money for unexpected bills. Even the most prudent person can't prepare against every crisis.
An emergency fund is money you set aside specifically to pay for unexpected expenses. You can also look for ways to spend less when you dine out.
If you didn't have an emergency fund prior to the COVID-19 pandemic, you likely wished you did. To get started, $500 to $1,000 is a good goal. When you meet that goal, you’ll want to expand it.
Experts disagree on whether to pay off credit card debt or create an emergency fund first. Pick the philosophy that makes the most sense to you, or do a little of both at the same time.
If you have a spouse or children who depend on your income, you need life insurance. Term life insurance is the least complicated and least expensive type of insurance.
Disability insurance will replace a portion of your income if you become seriously ill or injured. Student loans are a major drag on many people’s monthly budgets.
If you want to make a difference in the world, visit CNN.com/Impact. You can also donate to the JustGiving page to help the cause.
The sustainable withdrawal rate for retirement in the U.S. is based on a 15% savings rate and 45% income replacement rate. An online retirement calculator can do the math for you.
For most people who have an employer-sponsored retirement plan, the employer will match a percentage of what you are paid. You can get a 100% return on your investment if you contribute enough to get your full employer match.
A budget is a financial plan geared toward a specific, often short-term amount of time. Creating a budget can be a great way to keep track of your finances. It can also help achieve specific financial goals, such as cutting debt or saving money.
If you lose your job or get sick, don't give up. Just get back on the road to recovery. If you lose a job, don’t give up, just get back to work. If it’s your first job, it�’ll be your last.
