Creating a Financial Safety Net While Building Retirement Savings
A financial safety net is essential for low-income workers to protect their retirement savings from life’s uncertainties. This safety net, often in the form of an emergency fund, ensures that unexpected expenses don’t derail your long-term retirement plans.
Emergency Fund Strategies for Limited Incomes
Building an emergency fund on a limited income requires discipline and strategy. Start by setting aside a small, manageable amount each month. Consider automating your savings by setting up automatic transfers from your checking account to your savings account.
To make your emergency fund more effective, consider the following strategies:
- Prioritize needs over wants to free up more money for savings.
- Take advantage of windfalls, such as tax refunds or bonuses, to boost your fund.
- Use a high-yield savings account to earn interest on your emergency fund.
