AUBURN, AL (WSFA) - The rainy-day fund is money that you hope you'll never need because if you have to reach for it, something expensive happened.
According to a recent Bankrate.com study, 66 million American adults have $0 saved for an emergency.
"It is surprising. It should be somewhat alarming. Everyone at one point or another does have to have money for emergency situations. If people don't have the funds, they have to turn to alternative sources of funds, such as borrowing. Or someone may try to sell something that they really don't want to sell," said Jim Barth, Auburn University Finance Professor.
Barth believes there are several factors behind this big money mistake.
"Wages are not going up and incomes are not high for a lot of people. The average real household wage is down about $4,000 over the last several years. That isn't good. You find it differs among different demographic groups. Some groups, the average household income is $20,000 below the other groups," said Barth.
To take some of the financial sting out of the unknown, it is recommended that you have at least six months worth of expenses in an emergency fund.
"It is never to late to start saving. One can save something. One doesn't have to save a lot. One can start slow, put aside $5 per week or $10 per week. Give up a cappuccino if you can. Over time it will become a habit," said Barth.
Experts say education is key too. Parents can start their children on the right path early by giving them an allowance and requiring them to set aside something each time.