Financial experts say you should be saving even when paying down debts.
"Even if it's only $5 to $10 because it will take that time to get the habit broken into, and as the debt decreases, you will have increased in savings," says Samuel Molina, founder of The Academy of Financial Education.
A new Credit One Bank survey shows 51% of people would use a credit card for a $500 emergency. That percentage drops to 38% for a $1,000 emergency.
Molina says it's important to save three to nine months to prepare for long-term setbacks, including job loss.
"Let's say it costs you $3,000 a month to survive -- that includes your rent, your gas, water bill, electricity, that stuff, then you should have at a minimum $18,000 because that will get you through the next six months," he said.
The Credit One Bank survey also shows that roughly two-thirds of consumers have six months or less in savings.
"You should have enough in your bank account to cover any immediate emergency expense, so typically three months, but then the rest of your cash emergency funds should be in something that's yielding you," says Whelan Financial Chief Investment Officer Taylor Whelan.
Whelan says it's also important to consider inflation when saving for a rainy day.
"Typically, we recommend you have three to six months' worth of savings in a liquid investment," Whelan said. "That doesn't mean keep it in cash under your bed. If you have an emergency fund for years and years and years, inflation will eat away at that."
Click here to see the full Credit One Bank study.
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