"A majority of Americans say they can't afford a $1,000 emergency expense, a recent report from Bankrate finds.
Only 44% of Americans surveyed said they could use their savings to pay for an unexpected expense, instead opting to put it on a credit card or borrow cash from family or friends."
According to Anne Probert on cnbc.com, 56% of Americans can't afford a $1,000 emergency expense. I have always been money conscious and a saver and am terrified of the undertaking that paying off student loans will be. The thought of not having $1,000 to cover an expense is scary, and it's even more scary that this is a reality for more than half Americans. Personal finance is an important skill to have that I'm realizing most people don't have. Between having all the subscriptions, an average $700 car payment, and "keeping up with the Joneses," Americans are in a perpetual cycle of just spending money without realizing they need to save for a rainy day and spending their whole paycheck come pay day is unsustainable in the long run. I think we are finding that many are underinvested in their retirement funds and will be pressed when or if the can retire. The possibility of the Social Security fund that we are all currently paying into also doesn't help.
This article reminds me I need to update my monthly budget to not only account for savings for my distant future, but also for the time that I will need savings while I am out of work preparing for the bar.
Hey Matt, great post. With the financial literacy issue in America growing, do you feel as if this would be solved with more involved schooling and education at a younger age? Growing up, we had a single "personal finance" class that everyone was required to take their freshman year of high school. I think that people could benefit from a deeper educational foundation of financial literacy.
ReplyDeleteWith many Americans living "paycheck-to-paycheck," the ability to save and budget better is diminishing as a way to prepare for these unexpected emergencies. With high interest rates, credit cards are not a good option, leaving many families to struggle. I agree that this issue needs to be fixed, but I cannot think of how for those with no "leftover" money.
ReplyDelete