This week, I want to share some fundamental principles of personal finance: 1. Saving is for everyone.
Saving is democratic—there’s no discrimination when it comes to putting money aside. If you think saving is only for the wealthy, think again. Everyone, and I mean everyone, can save. It’s not just for high earners. Saving is a mindset, a way of life that stems from how you manage your relationship with money. 2. Saving leads to freedom.
When you save, you give yourself and your family the ability to handle life’s unexpected events with greater ease. Whether it’s pursuing a future goal, covering an emergency, managing bills after a job loss, or enjoying travel before and after retirement, saving provides a cushion that allows you to live with less financial stress. A group of researchers [1] introduced an eye-opening metric called "financial fragility," which measures a household's ability to access $2,000 within 30 days in the event of an unexpected expense. The results are startling: The most recent data shows that one in 4 Americans is financially fragile. This number increases dramatically for millenials ( one in 2) and women (one in 2.5). And to reiterate again, these are NOT just low income people. Infact one in 3 middle class people are financially fragile! Let me ask you the same question at the base of the research above: How confident are you that you could come up with $2,000 if an unexpected need arose within the next month? a) I am certain I could come up with the full $2,000 b) I could probably come up with $2,000.
c) I could probably not come up with $2,000.
d) I am certain I could not come up with $2,000.
e) Don’t know.
f) Prefer not to say.
(if your answer is c or d you are considered "financially fragile") [1] Lusardi et al. (2011), Financial Fragile Households:Evidence and Implications, Brookings Papers on Economic Activity | 
