A new survey of 1,600 working individuals found that 30 percent of them have no emergency money set up for unforeseen expenses two years after the COVID-19 outbreak forced Americans into lockdown.
If the 40 percent of the population that is currently unemployed were included, that number would likely be even higher.
Bipartisan Policy Center, Funding Our Future alliance, and Morning Consult conducted a poll that revealed 45% of persons with family incomes under $50,000 have no savings for an unexpected event.
For individuals with a household income of $50,000 to $100,000, the percentage reduces to 26%. Americans, on the other hand, had saved 36% of their stimulus money as of October 2021.
This shows that financial instability is not limited to those making less than $100,000, as 12 percent of people earning more than $100,000 do not have an emergency fund.
When asked whether they had an emergency fund in a checking or savings account, several of the respondents who answered “no” said they had money in a retirement account that they could tap into in the event of an emergency.
The ability to pay a $400 emergency payment without relying on a credit card or going into a retirement account is a concern for almost one-third of working adults, while eight percent indicated they couldn’t afford it.
Digging deeper, the survey showed that 22 percent of Americans who have emergency funds have less than $250 in their checking or savings account.
35 percent of working Americans have $1,500 or more in their savings accounts. However, this may not be enough to cover the costs of a typical family’s daily life.
30% claimed they could cover a month or less of expenses, while 15% said they could cover longer than a year.
In addition, 42% of Americans who are employed report feeling “somewhat” or “extremely” concerned about their financial security.
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As if that weren’t bad enough, they aren’t even prepared for the worst. More than 39 percent of working adults have had financial difficulties in the past year, according to a recent poll.
As a result, 14 percent of individuals surveyed said they borrowed money against their retirement account or withdrew assets from retirement savings to cover such costs.
Interest rates have risen and the stock market has fallen, making it more difficult for people to save for retirement. If you have to use a credit card to pay for an emergency, you may end yourself with much more debt than you already have to deal with.