Make rainy day savings a priority

Mason jar with pennies spilling out

Everyone needs to have at least six to nine months' worth of income in emergency savings.

That's savings accounts, money market accounts or CDs that you can easily tap in a financial crisis.

Too many families were living paycheck to paycheck when the Great Recession struck. They had little or no savings to keep their bills paid when they were laid off, sending their homes into foreclosure.

If you haven't socked enough away, temporarily redirect some of the money you're contributing to your retirement accounts into your rainy day savings.

Although we think saving for retirement is very important, having enough ready cash to keep the mortgage up to date is an even higher priority.

A good rule of thumb: Reduce your retirement contribution to the minimum required to qualify for your employer's matching funds.

For example, if your employer matches half of your contribution up to 6% of your salary, then reduce your contribution to 6%.

The matching contribution is essentially free money. You don't want to pass it up.

Bolster your emergency savings with whatever else you were contributing to your retirement account plus whatever other money you can scrape up.

Just don't reduce your retirement contributions forever. Once you reach your rainy-day goal, redirect that income back into your retirement funds.

We're sure the recession did some damage to your 401(k) and Individual Retirement Accounts, and you've got to make that money back as the economy recovers.

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