Tags: Polls | Federal Reserve | Americans | financial | expenses

Survey: 47 Percent of US Would Struggle to Pay $400 Surprise Expense

By    |   Tuesday, 02 Jun 2015 03:10 PM

In a report issued by the Federal Reserve, almost half of all Americans would struggle if they were faced with a $400 unexpected expense.

The federal agency asked 50,000 Americans in October 2014 what would happen in the case of a $400 unexpected "hypothetical emergency expense," according to the Report on the Economic Well-Being of U.S. Households in 2014, released in May.

Of those who participated in the survey, 53 percent said they would be able to "easily handle such an expense" through either their own funds with cash, money in a bank account or with a credit card, that they would be able to pay for in-full the following month.

However, 47 percent said that such an expense would be more of a challenge:

• 14 percent said that they would not be able to pay for such an expense
• 10 percent would have to sell something
• 18 percent would have to borrow the money from a financial institution or credit card, that would take months to pay off
• 13 percent would borrow from family or friends
• 2 percent would pay for it through a payday loan

As for more severe financial disruptions, such as the loss of a job, 45 percent of Americans said that they have a rainy day fund set aside to help pay for three months of expenses.

Of the remaining 55 percent, 21 percent said they said they could pay for three months of expenses through other assets and borrowing, but 32 percent said that they would not be able to cover such a financial disruption, even through borrowing.

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In a report issued by the Federal Reserve, almost half of all Americans would struggle if they were faced with a $400 unexpected expense.
Federal Reserve, Americans, financial, expenses
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2015-10-02
Tuesday, 02 Jun 2015 03:10 PM
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