In recent months, a concerning trend has emerged among American workers: a considerable rise in job loss anxiety. A new survey conducted by the Federal Reserve Bank of New York reveals that the levels of worry regarding the job market have surged to figures reminiscent of the tumultuous early days of the COVID-19 pandemic.

According to the survey findings, expectations around unemployment have seen a notable spike. Specifically, the percentage of individuals who anticipate an increase in the unemployment rate over the next year has jumped by 4.6 percentage points, reaching a striking 44%. This figure marks the highest level of concern recorded since April 2020. This escalation in anxiety is not confined to any particular demographic, as it spans across various age groups, educational backgrounds, and income levels, indicating a widespread apprehension about job security.

Amid constant discussions about the potential for a looming recession, the resurgence of inflation, and the unsettling frequency of layoffs impacting both federal employees and workers in large corporations, it is perhaps unsurprising that many individuals are feeling increasingly uneasy.

In light of this anxiety, experts suggest that workers should take proactive steps to bolster their financial stability rather than succumb to worry. One effective strategy is to significantly enhance one's emergency savings fund.

According to Sid Pailla, the chief executive of the Sunny Day Fund, a financial technology company specializing in emergency funds, Consumers are anxious about higher inflation and household expenses as well as lower wage growth combined with worsening job security across all income levels. He added, Its no surprise that were seeing emergency savings now top of mind as folks prepare for a potential financial blow. Having a financial cushioncash set aside to cover living expenses for several monthscan empower individuals to remain calm during uncertain economic times.

Liz Davidson, CEO and founder of Financial Finesse, echoed these sentiments, emphasizing the importance of having savings as a safety net. With many people worried about job security, it's not just about preparing for the unexpectedits about giving people the peace of mind they can weather the storm, Davidson explained. She stressed that having savings can make all the difference if one faces sudden job loss or unexpected expenses.

To build an emergency fund successfully, establishing a saving habit is crucial. Davidson recommends setting up automatic direct deposits from your paycheck into a high-yield savings account dedicated solely to emergency savings. The key is to start small and stay consistent, she advised. Setting aside a little bit each paycheck can add up over time. Starting with a goal like saving $500 or $1,000 is a great way to begin, and once thats achieved, you can keep going.

One effective method to ensure consistent savings is to save money before it even touches your regular spending account. This way, youre saving without thinking about it, Davidson noted, highlighting the effectiveness of automatic saving practices.

Generally, financial advisors recommend aiming for an emergency savings account that covers about a years worth of living expenses. However, for those who find that target overwhelming, starting with a more manageable goallike saving enough to cover four months of expensescan be a practical way to build confidence and security.

As economic uncertainty looms, taking these proactive steps can empower individuals to face possible financial challenges with confidence and resilience.