In a recent Fortune article exploring the rise of “doomspending”—a trend where consumers spend impulsively under the weight of political and economic uncertainty—experts weighed in on the challenges of building an emergency fund in today’s climate. Among them was Gerry Barrasso, CPA, CFP®, and president of United Financial Planning Group, who emphasized the importance of liquidity when saving for unexpected expenses.
Doomspending and the Savings Shortfall
The Fortune piece highlights a concerning finding: nearly half of Gen Z respondents (47%) reported having no emergency fund at all. Experts attribute this to economic setbacks, political turmoil, and an overwhelming deluge of social media messaging that leaves many feeling powerless or unmotivated to save. Instead, young consumers (and many from other generations) find themselves spending on immediate comforts or using credit to cover expenses.
To combat these risky spending behaviors, several financial professionals in the article recommend starting with small, consistent savings.
Gerry Barrasso’s Key Takeaway: Liquidity Matters
Gerry Barrasso CPA, CFP®, PFS, and founder of United FPG, provided a crucial piece of advice for anyone looking to protect themselves against unforeseen expenses:
“Emergency funds need to be liquid, or there really is no point. You need to be able to access the money immediately.”
Barrasso cautions that while certificates of deposit (CDs) and other interest-bearing accounts may currently offer attractive yields, tying your emergency money up in less-accessible vehicles can defeat the purpose of having funds on hand for, well, emergencies. In other words, if you can’t access your cash quickly without penalties or delays, it won’t do you much good when a real crisis hits.
Conclusion
Gerry Barrasso’s quote in Fortune serves as a timely reminder for savers in every generation: an emergency fund is only as useful as it is accessible. With economic headwinds and political uncertainty likely to linger, prioritizing a liquid, well-funded emergency account can offer peace of mind and financial stability.
At United Financial Planning Group, we understand that every individual’s circumstances are unique, and we tailor our advice to fit your specific goals and challenges. Whether you’re just starting your emergency fund or seeking ways to optimize an existing one, our team is here to guide you through the process and help you make informed decisions for your financial future.