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Earlier this week, I was walking through Wal-Mart with one of my friends and we saw an inflatable swim toy with a bull on it. (Much like the one in the picture below).

Image found on Amazon.com and clicking on the image will lead you to Amazon.

Upon seeing this bull and the $50 price tag, my friend stated, "$50 for that...That's why people are broke these days."

I had to laugh and I responded, "We could walk around Wal-Mart and find hundreds of ways people are broke these days." I'm not picking on Wal-Mart, because any store preys on the consumer, and I'm not mad at them, because it's their job to make money.

We as the consumers just have to be smarter and make rational decisions when it comes to stuff. Having too much stuff and constantly buying new things is one of the biggest reasons families are struggling to make ends meet.

Families struggling with finances was the topic of the Fed's latest report of 'Economic Well-Being of American Households.' There was some alarming data reported and Tyler Durden, an author at Zero Hedge, did a nice break down of data in his article on the site.

One stat in particular jumped out to me. The Fed Reported "44% of the Americans surveyed don't have $400 cash for emergencies."

Let's Think About That One More Time:

ALMOST HALF of AMERICANS Don't Have $400 for an UNEXPECTED EMERGENCY.

At one point in my life, I fell into this category. I couldn't pay for $300 tires and I had to take out a direct deposit advance to pay for new tires. But let's be completely honest, I was the person that put myself in that position. I ran up the credit card bills. I spent my money on random crap. I was the reason for the lack of cash when an emergency arose.

Related: Rock Bottom

If you happen to fall in the 44% of Americans with less than $400 in cash for emergencies, you need to take a good hard look in the mirror. That person in the mirror is spending too much and living an inflated lifestyle. That person in the mirror is living for the weekend and doesn't think about the future.

EMERGENCIES are GOING to HAPPEN!

Just this year alone, my wife and I have dealt with multiple emergencies that would have knocked 44% of America down. Just look at the emergencies that have hit my family this year:

March: $350 car repair
March: $227 for a new microwave (old one died)
June: $600 car repair
June: $2,400 A/C repair
Total: $3,577

In 6 months, we have had $3,577 worth of emergencies. We are able to make it through this time because we have an emergency fund that can support life's unexpected events. Life is not always smooth and bad things will eventually happen. For your families security, you need to build up an emergency fund.

You can begin building up an emergency fund by following the steps below:

CUT OUT EXCESSIVE SPENDING: Print out a statement of your accounts from May or June and look at each expense. Were the expenses necessities? If not, make sacrifices to cut out these expense (the inflatable bull would be unnecessary).
MAKE SURE TO STAY UP TO DATE ON ALL BILLS: Do not cut out anything that is necessary. Paying a monthly water bill, a monthly mortgage and your credit card bill should be all things that you continue to pay.
THROW ANY EXTRA MONEY AT A SAVINGS ACCOUNT: This money should come from the money that you have saved by cutting out excessive spending.
USE THE CORRECT SAVINGS ACCOUNT: Do not lock your emergency fund in a CD or an investment. You need to have an emergency fund readily available (in the financial world they call this liquid). A liquid account is easy to access and can be used at the drop of the hat.
ONLY USE YOUR EMERGENCY FUND FOR EMERGENCIES: I shouldn't have to say this part, but some people will see the money in their account and go buy a new gaming system or a motorcycle. Those are not emergencies.
REPEAT: Keep building up your emergency fund until you reach 3 to 6 months of spending in your savings account. Once you reach 3-6 months, then you can use that extra money to pay down debts or your mortgage. If an emergency does arise, you must replace the money that was used from the account (my wife and I are working on this due to our emergencies that have depleted our rainy day fund).

You have heard the term "Rainy Day" or "Murphy's Law." Both of these terms refer to a time of something bad happening. It will happen. Murphy will show up and slap you in the face if you aren't prepared. It will feel like a thousand gallons of rain just got dumped on your head. Avoid the 'rainy day' feeling by being prepared.

In a life full of uncertainties, you can control yourself. You can control your bank account and your spending. You must save for the rainy day on the horizon.