Page 25 - ARUBA TODAY

BUSINESS Wednesday 27 February 2019
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Millennial Money: Don't freak out about your emergency fund

By AMRITA JAYAKUMAR or a transition, the whole
Associated Press idea is you would cut back
Let's be real: For millenni- on your spending."
als, having an emergency A savings account that
fund is way down on the pays a high interest rate is
financial worry list, behind a smart place to keep your
student loan debt, medical fund, both planners say, so
bills or saving for a down it can grow.
payment. MAKE USE OF WINDFALLS
Some weeks, it can feel like An easy way to kick-start
you barely have enough your fund is to use windfalls
money to get by, let alone — part of a tax refund or
put some away for a rainy even birthday money from
day. relatives. Young profession-
But that cash stash can als typically get tax refunds
be crucial in preventing instead of owing money,
a debt spiral or keeping Gabor says. The IRS allows
you afloat if you lose your you to direct deposit your
job. Regardless of income, refund in up to three ac-
building your emergency counts, so you can send
fund doesn't have to be in- part directly to your emer-
timidating. In this June 15, 2018, file photo a canning jar filled with currency sits on a shelf in East Derry, N.H. gency fund. If no windfall
START SMALL, BUILD A HABIT Associated Press is imminent, check your
First, pick an amount you checking account. Leave
can put away on a regular at saving. amount above that — under 65. It defined finan- a small buffer so that you
basis, no matter how small. The saving habit — even if $400, $500 — improves your cial insecurity as the "inabil- aren't at risk of overdraw-
Then, commit to it. it's small — is valuable for chances of navigating a ity to come up with a small ing and put anything else
"It can be as little as $10 a your finances in the long setback. amount of money to buffer in the emergency fund to
week into a separate sav- term, says Eric Gabor, a Getting started is espe- negative economic shocks earn interest, Lamb says.
ings account," says Lara certified financial planner cially important for young- or to pay his or her cred- There's no ideal amount to
Lamb, a certified financial at Eagle Grove Advisors in er adults. An Urban Insti- it card or nonmortgage keep in your checking ac-
planner at Abacus Wealth Jersey City, New Jersey. tute study released this loan." Lamb suggests work- count. But both financial
Partners in Los Angeles. A family with at least $250 year found 35.6 percent ing toward one month's planners warn that having
Making a small contribution in savings is less likely to of adults ages 18-34 sur- fixed expenses, which in- a lot of extra "cushion" in a
every week is less painful face financial turmoil such veyed in December 2017 cludes rent, groceries, checking account carries
than shooting for an ideal as a missed utility payment had experienced "financial transportation and insur- the temptation to spend it.
final sum, she says. Auto- or eviction, according to insecurity" in the previous ance. "Don't worry about PLAN FOR NON-EMERGEN-
matically transferring the a 2016 study by the Urban 12 months. That was the your eating-out money or CIES
money to a separate ac- Institute, a Washington, highest among the study's shopping money," she says. If you're building the habit
count helps you succeed D.C.-based think tank. Any three age groups of adults "If you are in an emergency of saving for emergencies,
use that muscle to plan for
other expenses.
US housing starts plummeted 11.2 percent in December Financial experts often
use the terms "irregular ex-
penses" and "unplanned
By JOSH BOAK gesting that affordability expenses." An unplanned
WASHINGTON (AP) — The challenges have caused expense is something you
number of homes being the pool of would-be buy- don't foresee, such as an ill-
built in December plunged ers and renters to dwindle. ness or car repair. q
to the lowest level in more The housing market initially
than two years, a possible cooled last year as aver-
sign that developers are age, 30-year mortgage
anticipating fewer new rates climbed to nearly 5
houses to be sold this year. percent. But that average
The Commerce Depart- has fallen sharply in recent
ment said Tuesday that weeks, which might help
housing starts fell 11.2 per- boost some home purchas- In this Wednesday, Feb. 20, 2019, photo a construction crew
cent in December from es in 2019. Still, home prices works on an already sold new home in north Dallas.
Associated Press
the previous month to a have consistently risen fast-
seasonally adjusted annual er than wages and the in-
rate 1.08 million. This is the ventory of homes listed for
slowest pace of construc- $250,000 or less is tight, sug-
tion since September 2016. gesting a sluggish market
Over the past 12 months, going forward.
housing starts have tum- Permits to build housing, an
bled 10.2 percent. Decem- indicator of future activity,
ber's decline occurred for increased just 0.3 percent
single-family houses and in December. Among sin-
apartment buildings. Build- gle-family houses, permits
ers have pulled back as fell 2.2 percent in Decem-
higher prices have caused ber and 5.5 percent from a
home sales to slump, sug- year ago.q