If you're working hard but are in disbelief about the state of your bank account, you're not alone. A recent national survey revealed that 44 percent of Americans could not afford a $400 emergency expense without borrowing or selling off assets. Americans also currently average a savings rate of significantly less than 5 percent.
Luckily, you can put more money in savings while still living comfortably with one surprisingly simple fix: It's time to revisit household budgeting. Americans are earning, saving and spending enough, just in the wrong order.
As a certified financial planner, I recommend breaking down your finances into three categories: spend, save and donate. However, that hierarchy often lends itself to a 100/0/0 allocation, which I find totally backwards.
The quick fix is to reverse the order and attempt a 10/10/80 allocation of cash flow: Save 10 percent, donate 10 percent and then spend 80 percent.