A standard measure of your financial health is how much money you’ve saved up for those rainy days. By that measure, millions of people in the US are at risk of being submerged in water.
According to a new survey from Bankrate, more than half of Americans lack savings to cover an unexpected $1,000 outlay. And completely one-third of households would have to use credit cards, take a personal loan, or borrow money from family or friends to deal with such an emergency.
Of those, 20% of respondents said they would cover unplanned expenses by going with plastic – a move many experts advise against because of the average interest rate credit cards offer. last year’s change of up to 16%, Bankrate data shows.
In total, just 44% of more than 1,000 adults polled by Bankrate said they had enough money to cover such an expenditure, the personal finance website said. That’s actually slightly better than last year, when only 39% could afford to cover $1,000 – such as unplanned medical or car expenses.
As a general rule, everyone should set aside three to six months’ worth of expenses for emergencies.
The meager savings in the United States cut through generations. While only 42% of Generation Z consumers – those aged 18 to 25 – can handle a quadruple sudden expense, 44% of baby boomers (ages 58 to 76) and 48% of Generation X (42 to 57) have enough money. Go, Bankrate found.
One factor that makes it harder for people to save: inflation. Consumer prices rose 7% in 2021, the strongest increase in nearly 40 years, according to a Labor Department report last week. That increase is driving up the cost of food, shelter, energy, new and used cars, and other necessities. Nearly half of those polled by Bankrate said higher inflation was hindering their savings efforts.
Millions of families are also feeling the pinch as the enhanced Child Tax Credit (CTC) has lapsed. Under the federal program, aided last year to provide relief to households affected by COVID-19, parents have received payments of up to $3,600 annually per child, up from $2,000.
But the CTC has stalled in Congress along with the rest of the Biden administration’s latest relief measure, the Better Rebuilding Act. Parents receive their final check from the government program in December.
For many low-income Americans, saving money is indisputable when even putting food on the table is a struggle. More than 10% of adults – 22.7 million people – face food insecurity, meaning they sometimes or often don’t have enough to eat, new Census data shows. The figures also show that nearly a third of people said they have difficulty paying for typical household expenses.
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https://www.winknews.com/2022/01/20/less-than-half-of-americans-can-cover-a-surprise-1000-expense-survey-finds/ According to the survey, less than half of Americans can afford an unexpected $1,000 outlay