NEW YORK (TheStreet) — Americans actually want to put more money away in case of an emergency, like a health issue or lost job. But most believe they don't have the means, determination or the wherewithal to save enough money in a so-called rainy day fund.
BMO Harris Premier Service notes this week that while consumers do save for rainy days, they "lack a concrete financial plan, and only half save in a systematic manner, such as contributing from every paycheck."
That might be why only 20% of respondents in a BMO Harris survey thought they had an emergency fund that would help them survive a year of bad health or unemployment.
Many savers seem to believe they have an out in an emergency situation — they can rely on retirement funds to bail them out. More than three-quarters of U.S. adults surveyed by BMO Harris (76%) had already dipped into retirement savings for such things as unexpected repairs. But as financial professionals point out, relying on a retirement bailout when you need cash is no plan at all.
"Dipping into a retirement fund should be the last resort," says Alex Dousmanis-Curtis, head of U.S. retail banking at BMO Harris Bank. "Not only are there financial penalties for liquidating those accounts early, but also that money that will be missed — even if retirement is 30 or 40 years down the line."
There's a better way for Americans to create, build and sustain a rainy-day fund — one that lasts for the long term and is no secret: being disciplined and creative.