KIMT News 3 – Tax season is upon us and financial experts say saving this year’s refund can help when emergency strikes.
The Iowa State Extension Office says only one in four Americans have an emergency fund that meets recommendations.
In past years people were told to save at least six months of pay in case of an emergency but with today’s economy coming into play, nine or more months is now the benchmark.
“If something happens and you lose your income, it will take you more than six months to find a job equal to what you had lost. So that’s why it’s important,” said Brenda Schmitt from Iowa State Extension.
The recommended minimum goal is to save an amount equal to three or more months of living expenses.
“Make that one of your monthly bills and say 10 percent of the take-home pay goes into an account for emergencies. If ever you dip into that emergency fund to take money out to pay for something, treat that like a loan to yourself,” said Schmitt.