Financial disparities between men and women are a well-known fact. The Bureau of Labor Statistics recently reported that women take home a paycheck that is 20% less on average than men. But these differences are not limited to take home pay—they also extend to the way that men and women handle their finances, and how they feel about their overall financial wellbeing.
A survey from Freedom Debt Relief suggests that women generally feel worse about their debt than men do. While 49% females stated that debt left them feeling very stressed, only 42% of males responded the same way. A shocking 41% of women also said that they are unable to save for retirement because of debt and 31% said they are unable to buy a home because of debt.
More women than men also report financial stress due to lack of savings. 47% of women stated that they do not have an emergency fund and 28% women said they would find it very difficult to cover an unexpected $500 expense—compared to only 15% of men who say it would be difficult.
Survey results show that savings trends for men and women are markedly different, with 44% of women, compared to 31% of men, stating they have less than $1000 in their savings and checking accounts combined.
Across the U.S, both men and women find themselves having a hard time making ends meet, so if you’re struggling with your finances, you are not alone. One way to establish better financial footing is to start an emergency fund. Having money stowed away for a rainy day could help you avoid additional debt when you’re hit by an unexpected expense.
Here are a few steps you can take to start your emergency fund:
1. Set up a separate account
Opening an account at your local bank that will be used for emergency savings helps you stay committed to your goal. It’s even better if you can set up automatic payments from your checking account to your savings account. Even if you can only afford to transfer $25 per month, by the end of the year your emergency fund would be $300. That’s the cost of a minor car repair or doctor’s visit.
2. Pay yourself first
Every time you get a paycheck from any source of income, put a little money into your emergency fund. It’s suggested to put away 10% or more of your paycheck for retirement and other savings, but when it comes to an emergency savings fund, making small but consistent deposits could go a long way.
3. Save your windfalls
Tax season is just around the corner, and it’s the perfect opportunity to beef up your emergency fund—especially if you’re planning to get a refund this year. Instead of spending your tax refund on yourself, consider transferring it to your emergency fund instead.
4. Generate extra income
The gig economy is a great way to get a head start on an emergency fund. Driving for a rideshare app, freelancing, or picking up extra hours at work are just a few actions you can take to make more money and siphon some or all of it into an emergency fund.