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A true story of emergency savings at work

Forty-five percent of middle income households don't have a savings or money market account, according to recent data from the Federal Deposit Insurance Corporation (FDIC). Meanwhile, 51 percent of Americans don't have the funds available to pay for an unexpected expense of $1,000 or more.

In other words, the majority of Americans today have no emergency savings in place and many more have far less than the recommended three to six months of expenses stashed away.

Because life can unexpectedly throw a costly illness or imminent home repair your way, being prepared with a financial safety net can help keep a bad situation from getting worse. Just ask Dominique Reese, a personal financial coach and consultant, who was able to save herself from financial turmoil by having a well-funded safety cushion in place.

The unexpected strikes

Reese was working for a financial start-up that lost its funding, closed down and ultimately led to a widespread corporate layoff.

She was out of work for one week when she was discovered something else: She was expecting a baby.

Pregnant and unemployed, Reese balanced a drive to start her own business with her need to take care of a budding family.

Reese was fortunate to receive a small severance from her former employer, but what helped her really stay afloat was the three month safety cushion she'd diligently stashed away while she was still working.

"There's no way to be prepared for a layoff except to build an emergency fund," she says. "As long as I'm saving, I feel less worried about unexpected and uncontrollable events."

While some worry that saving small amounts will have no impact on their security, diligent saving of small amounts can amount to something bigger over time. According to Patricia Nelson, founder of the community outreach program Wise Women Workshop, "Even if you can scrape up savings of $100 per month, that's $1,200 per year. Those numbers add up over time."

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