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$1,000 Emergency? Most Americans Don't Have That Much Saved

$1,000 Emergency? Most Americans Don't Have That Much Saved
Most Americans don't have the savings to cover a $1,000 emergency. (Pamela McAdams/Dreamstime.com)

By    |   Thursday, 18 January 2018 04:08 PM

Most Americans don't have the savings to cover a $1,000 emergency, according to a new Bankrate study that found only 39 percent have an emergency fund of $1,000 or more. 

Bankrate’s new Financial Security Index survey showed 34 percent of households, more than a third, had a major unexpected expense during the previous year and that the average expense of this kind is at least $2,500.

“Unplanned expenses can pop up at any time, and your best protection is having an emergency savings cushion,” Bankrate Chief Financial Analyst Greg McBride said.

In the survey, most people without the funds to cover a $1,000 emergency said they would put an unexpected expense on a credit card, which would mean paying interest on top of the cost of the expense itself. 

Lower-income households making less than $30,000 a year had twice the likelihood of borrowing money than those making more than $50,000 a year, Bankrate reported. 

A recent Federal Reserve report found 44 percent of Americans couldn’t even cover a $400 emergency expense from their existing savings, Bankrate said. 

Financial experts recommend having three to six months of expenses put away in case of emergency expenses or a job loss.

McBride recommended saving what you can now, then directing any additional income from raises or the newly passed tax bill into your savings to bulk it up faster. CNN Money suggested putting the amount you want to save directly into your savings account so it won't go into your regular account and tempt you to spend it.

Online savings accounts currently offer the best interest rates, CNN reported. 

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If they have a $1,000 emergency, most Americans don't have the savings to cover it, according to a new Bankrate study.
1000, emergency, most, americans, savings
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2018-08-18
Thursday, 18 January 2018 04:08 PM
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