[Money Mondays]: Savings and Emergency Funds

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What percentage of Americans have less than $400 in an emergency fund?


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Answer:  47%
Almost half of Americans say they would have to borrow money or sell something to cover an emergency cost of $400 or more.
  • Are you surprised?
  • What are some reasons why 47% of Americans cannot afford this cost?
  • Can you think of 3 emergency costs that are $400 or more?
From the Wall Street Journal:  “But for many Americans, household finances remain fragile: 47% said they wouldn’t be able to cover a $400 emergency expense or would have to borrow money or sell something, and 31% said they went without some form of medical care in the last year because they couldn’t afford it.”
That may go a long way towards explaining why banks collect so much in overdraft fees as credit card companies earned over $158 billion in 2015 and payday lending is such a growth industry.
Resources:
Wall Street Journal - Economics Blog “Household Finances - Fed Survey”
Wall Street Journal - Credit Card Issuers are Charging Higher
The Guardian - US Payday Loans Crisis


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