50% of Americans Could Not Pay a Sudden $500 Expense
A new report found nearly 6 of 10 Americans do not have at least $500 in their savings account as a cushion against emergency expenses.
The study by financial website Bankrate showed just 41% of Americans surveyed would be able to use savings for an unexpected expense of $500 or $1,000.
20% of respondents said they would use a credit card for the unplanned expense, while another 20% would cut spending and 11% would borrow or accept money from friends and family.
Bankrate said the situation “a persistent American problem of how you should handle your finances and spending”
Almost 50% of Millennials (ages 18-34) said they had $500 or more in savings, while seniors over age 71 were most likely to use credit cards to cover the expense, Bankrate said.
Last year, just 37% of those surveyed said they could cover an extra expense of $500 or more, so this year’s number is an improvement.
A full 45% of respondents reported they or an immediate family had a major unplanned expense in the previous year, a 2% increase from last year’s survey, Bankrate reported.
Financial experts recommend saving 10 to 15% of your salary and having at least 6 months of expenses saved in an emergency fund, Bankrate reported.
Have a terrific weekend.