This Is the Best Financial Resolution to Improve Your Life in 2024

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Time to start picking goals for 2024. Here’s why building an emergency fund is a great way to help you feel secure next year — and beyond. 

Just recently, The Ascent’s research team released the results of the Financial New Year’s Resolution survey. This survey was created to assess Americans’ goals for the new year and how they think they’ll fare when it comes to meeting them. Two-thirds of respondents reported that they intend to set a financial resolution for 2024, and the most common ones aren’t at all surprising.

Paying off debt and saving money for a big goal (like buying a home) took the top spots. But tied for fifth place (with just 8% of respondents signing on for this goal) is building an emergency fund.

When I read this stat, I was a bit confused by its lack of popularity. I lived for years without emergency savings, and slid deeper and deeper into debt as a result. If you have the means to put money into a savings account for a rainy day (sadly, not a guarantee for all Americans), you absolutely should — and here’s why.

What can an emergency fund do for you?

Unfortunately, most of us are stuck without the means to pay off a surprise expense without going into debt. The emergency savings startup SecureSave found earlier this year that 63% of American employees would be unable to cover a $500 emergency out of their savings. And this kind of financial stress has a real impact — financial stress is responsible for job dissatisfaction and lower productivity, and causes a $4.7 billion loss of productivity every week. Having money put aside for unplanned bills doesn’t mean you’ll have no stress at all (living without any kind of money stress is likely beyond all but the richest of us), but since life is full of surprises, it can go a long way toward ensuring a greater sense of security.

To provide a relatable example, one of the more frequent surprise expenses I face often is a car repair bill. My car is extremely reliable, but it’s also old — I’ve had it for more than 14 years, and since I paid it off, I’ve been maintaining it. Keep a car for so long, and unfamiliar parts will break or wear out — like coil springs. And then you’ve got to pay to have them fixed, to keep the car safe and functional.

Last year, I improved my financial situation and no longer live without emergency savings, which has lessened the stress of car maintenance significantly. I still don’t love whipping out a credit card at the mechanic shop, but at least when I do it now, I know that I won’t be carrying that charge forward and paying interest on it. I can get reward points for using the card, and then turn around and pay it off.

How do you build an emergency fund?

I hope I’ve talked you into at least considering adding “build an emergency fund” to your list of resolutions for 2024. But how do you actually do it? These tips can help.

Boost your income

If you have the ability to take on extra work (in the form of a side hustle, perhaps?), doing so in service of your emergency fund is fantastic. Any extra money you can bring in won’t already be committed to your bills, so you can immediately stick it in the bank. It’s usually going to be easier to boost your income than to cut your spending to the bone.

Reevaluate your spending

Are you paying $30 a month for a few streaming services you never watch? How about $50 a month for a gym membership even though getting there has gotten harder and harder? These are the kind of expenses you likely won’t miss if you eliminate them. Don’t assume you must cut all the joy out of your life, but this can be an easy way to free up money in your budget.

Save in the right place

Right now is a great time to open a new savings account, because you have so many options. The best savings accounts come with high APYs, no fees, and user-friendly mobile apps. This means you’ll earn money on your money, pay nothing to keep it safe, and get to check up on it anytime you want.

Doing something for your future self feels amazing. And saving an emergency fund in 2024 is one of the nicest things you can do to ensure good sleep and less stress. Why not give it some thought?

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