The Federal Reserve recently reported that four out of 10 American adults surveyed said they would struggle to pay for an unexpected expense of $400 or more.1 This revelation goes against the common financial advice urging adults to have three to six months of expenses saved in an accessible account for emergencies.2
Nearly everyone has multiple financial priorities, so it’s important to create a strategy that allows you to easily access money. It’s usually not a good idea to consider accessing money locked up in CDs or taxable accounts, since that may trigger taxes and penalties. It’s also important to create a budget as part of your strategy so you can track household expenses. This can help you find ways to save for retirement and emergencies. If you’d like to learn more, please give us a call at 715-835-6022.
In the meantime, here are some ways you may be able to earn extra income you can dedicate either to a savings goal or a special purchase without depleting any savings you have.
Now that summer is in full swing, have you thought about renting out your house for some extra cash? You can either rent out a room or the whole house while you are on vacation. In some scenarios, homeowners aren’t required to report rental income on their federal income taxes if they rent out their primary residence for no more than 14 days a year.3You should speak with a tax professional regarding your personal situation.
If you’re looking to downsize, combine your income-earning opportunity with decluttering. You can find a host of websites allowing your “trash” to become someone else’s “treasure” — with a reach far beyond your neighborhood. Check out the following websites for ideas on what could sell at a specific price:4
- Amazon: Sell just about anything
- eBay: Sell just about anything
- BookFinder: Books and textbooks
- ThredUp: Clothes and accessories
- Decluttr: DVDs, CDs, video games, cellphones and other tech products
- Gazelle: Electronics
- RubyLane: Vintage, antique and collectible items
- NearlyNewlyWed: Wedding dresses and accessories
If you just need cash now and then, consider setting your own schedule as an Uber or Lyft driver. Depending on a range of variables, you can earn anywhere from $13 to $17 an hour. While that may not fund your emergency savings account quickly, you can do it in your spare time while still working a full-time job.5
If you’re in a serious situation — particularly if your savings are being depleted by medical bills — consider GoFundMe. Between 2010 and 2017, more than 50 million people contributed more than $5 billion to GoFundMe campaigns, one-third of which went to medical fundraisers. Requests can generate as much as $100,000 from a combination of friends, family, neighbors and veritable strangers willing to help out. When you consider that you never know who you help with a charitable contribution, the GoFundMe platform at least allows donors to learn the recipient’s story and how their dollars help make a difference.6
1 Matthew Boesler. Bloomberg. May 23, 2019. “Almost 40% of Americans Would Struggle to Cover a $400 Emergency.” https://www.bloomberg.com/news/articles/2019-05-23/almost-40-of-americans-would-struggle-to-cover-a-400-emergency. Accessed June 17, 2019.
2 Sebastian Obando. Forbes. June 14, 2019. “How to Create an Emergency Fund.” https://www.forbes.com/advisor/sebastian-obando/2019/06/04/how-to-create-an-emergency-fund/. Accessed June 17, 2019.
3 Darla Mercado. CNBC. May 15, 2019. “Don’t forget these tax breaks if you’re renting out your home this summer.” https://www.cnbc.com/2019/05/15/grab-these-tax-breaks-if-youre-renting-out-your-home-this-summer.html. Accessed June 17, 2019.
4 Leslie Truex. The Balance Small Business. April 26, 2019. “8 Fast and Easy Ways to Make Extra Money from Home.” https://www.thebalancesmb.com/make-extra-money-from-home-4053256. Accessed June 17, 2019.
5 Ridester.com. Jan. 22, 2019. “Uber vs Lyft: A Comprehensive Comparison.” https://www.ridester.com/uber-vs-lyft/. Accessed June 17, 2019.
6 Jeffrey Young. Huffington Post. June 10, 2019. “Life And Debt: Stories From Inside America’s GoFundMe Health Care System.” https://www.huffpost.com/entry/gofundme-health-care-system_n_5ced9785e4b0ae6710584b27. Accessed June 17, 2019.
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.