It's my pleasure to welcome you to the Clark Howard Show, our mission is to serve you

and empower you to make better financial decisions in your life.

So question for you.

If an oops happened in your life, can you afford it?

Unfortunately, most Americans don't have enough cash to handle in oops.

And people are turning to really trouble some ways to get that money, to borrow that money.

I want to talk about how prevention is the best cure with your wallet.

Later in the show, I'm also going to talk about grocery shopping.

And the method that is saving more and more and more of us money that's been there all along.

So surveys ask the question all different ways, but generally somewhere close to half of Americans, even those of higher income, big percent to people with higher income,

cannot cover a theoretical $400 unexpected expense.

A sudden visit to a doctor not covered by insurance or a problem with your vehicle or the water heater goes out at your house.

And whatever it is, we're living so tight that we can't afford the unexpected, but the unexpected always happens.

You cannot price life for perfection.

And I'm very worried about how this mentality has taken hold to use a 401k as just this piggy bank that the 401k becomes the thing you go to to grab money when you need to do a repair of some kind.

And it's funny because people will call me and they'll ask me a question or we'll have one on the podcast from someone who's like, is this an exception to your 401k rule about not borrowing from a 401k?

And it's really hard for me to ever say that it is a reasonable exception to borrow that money from the 401k because you can't look at things just in isolation.

What does it do to your long term financial independence and trajectory when you pull that money out of a retirement account at the same time, what are most people do when they haven't unexpected expense?

If they have it, they pull out a credit card and they charge it at an interest rate that typically it's going to be close to 20%.

And then for every dollar you borrowed, you're paying back the equivalent of a dollar 20 if you get it paid off in a year.

It's not great either. I mean, these are tough, tough issues.

So it's why I have my obsession with having from every paycheck, some money, any amount of money, go into a savings account that you do a split deposit.

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