Here’s how much money financial experts say you should have saved for an emergency

MADISON, Wis. — Half of Americans say they’d struggle to afford a $400 emergency expense right now, according to a report by the Federal Reserve Board.

That’s why the often-shared advice you should have enough money stashed away to cover three to six months of expenses is largely impractical and overly ambitious right now. It’s unrealistic to tell people who are trying to get by, living paycheck-to-paycheck, or living on unemployment during a pandemic to have six months of savings.

While you do need to save some amount, how much is largely dependent on your individual income and comfort level.

Financial analysts give this example: Right now, if you are making 25% less than what you were making pre-pandemic, save 25% less. That’s more realistic. Or, if you say you can save $25 a paycheck, then save $25.

It can be overwhelming to both spend less and save more. So pick one, and take it a week at a time.

The amount you’re able to save can also be tied to the government’s response. Financial experts suggest putting some of your stimulus check, tax refund, or enhanced unemployment benefit money in your savings.

The bottom line: Any amount you can save is a good first step.

Financial experts recommend making two changes today to save more money.

  1. Only make the minimum payment on your credit card bill if you’re worried about your job, or have already experienced a pay cut.
    By paying only the minimum, your balances will increase, but at least you’ll maintain a record of consistent and on-time payments. It is important to pay off your credit card — in fact, carrying a balance will cost you in high interest over time — but if your income stream has slowed down significantly, holding off on debt can help you temporarily stretch your cash for a few months.
  2. Save cyclically, meaning your savings should ebb and flow with your income stream.
    For example, if you are making 25% less this month than you were last month, save 25% less than what you normally would. This approach is often used by people who are self-employed, but right now, it applies to anyone with an inconsistent income.