The Critical Move 24% of Americans Plan to Make in 2019

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The start of a new year is a good time to buckle down and pledge to be more fiscally responsible during the months that follow. And thankfully, 24% of Americans have plans to make one key move that could save them from financial ruin down the line: build an emergency fund. That resolution, in fact, ranks as one of the most common in a recent survey by Principal Financial Services, which also found that a large chunk of Americans are pledging to cut back on spending and rid themselves of debt in the coming year.

If you're currently without an emergency fund, establishing one is perhaps the most important thing you can do next year. And the sooner you get moving on it, the better.

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Why save for emergencies?

It's very simple: If you don't have money around for unplanned expenses, you risk landing in debt the second one falls in your lap. And make no mistake about it: Life offers a host of opportunities to accumulate unanticipated bills. You could pull out of your driveway and get into a fender-bender, or go to start your car and realize it won't comply. You could wake up one morning to a freezing house whose heating system has completely busted, or throw clothes in the laundry and have your washing machine give out on the spot.

And let's not forget the possibility of losing your job -- something that happens even to the most reliable, valued workers among us. It could take a few months to find a new one, and you'll need money to pay your bills while that happens.

Enter the emergency fund. It's basically your sole means of preserving your finances when the unexpected strikes. And it should be somewhat substantial -- enough to cover at least three months' worth of living expenses, and, ideally, more like six months' worth.

Most Americans, however, are nowhere close to having that much cash socked away. A frightening 58% of U.S. adults have less than $1,000 in savings, which is nowhere close to what a true emergency fund should contain. If you're lacking that safety net, make it your priority to build some cash reserves in 2019 -- before you find yourself on the hook for an expense you can't afford.

Building your emergency fund

Coming up with three to six months of living expenses is easier said than done, but there are a few steps you can take to help move that effort along. First, create a budget if you don't have one already. This will help you see where your money is going, and from there, you'll know where there's room to cut costs. Speaking of which, you'll probably need to slash some expenses to build your safety net, so get on board with making a few sacrifices. If you can't live without cable TV, go easy on takeout and restaurant meals. Or, treat yourself to prepared food, but stop taking rideshares all the time and deal with the bus instead. You probably have options to play around with.

Next, get yourself a side hustle. It doesn't have to be torture; find something you enjoy doing, whether it's writing, dog walking, or graphic design, and spend a few hours each week making some extra money. Since those earnings won't already be earmarked for another purpose, you should have no problem saving them all.

Finally, bank your raise, if you have one coming to you in the new year. If you arrange for your extra income to automatically land in your savings account, you'll remove the temptation to spend it, thereby boosting your efforts.

Building a solid emergency fund is something you probably won't do overnight, especially if you're starting with little to nothing. But if you make it your priority, you'll be in a much more financially secure place by this time next year.

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