A new online tool lets you see how much you need to make it through a simultaneous dip in income and a spike in expenditures.
The institute's research, based on anonymized data from 6 million primary checking accounts at JPMorgan, shows that many families have dips in income and spikes in spending throughout the year. And if those two things happen at the same time, a cash cushion — which differs across income and age groups — would help them get through it rather than fall into financial trouble.
"We always think about savings as saving for something like an emergency but, in fact, people need savings just to manage their cash-flow picture," Greig said. "Maybe you worked fewer hours one month and had to buy a flight home for Thanksgiving," she said. "What if those things happen at the same time?
"It's not necessarily an emergency," Grieg added. "I'd characterize it as volatility in both income and expenditures."
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