Question: What Percentage of Americans Have LESS Than $400 In Emergency Fund?

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May 27, 2015
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Question of the Day, Research, Budgeting, Credit Cards, Savings

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Answer: 47%

From 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 (see earlier post), credit card companies were expected to earn revenue over $158 billion for 2014 and payday lending is such a growth industry.

Here are some great follow-up questions to ask your students about this resource:

  1. Were you surprised by the fact that 47% of Americans cannot afford an emergency cost of $400 or more? Why or why not?  
  1. What are some reasons for why 47% of Americans cannot afford this cost?
  1. What are 3 emergency costs that are $400 or more?
  1. What impact(s) would borrowing money to cover an emergency cost have on a person who cannot pay the cost from their own funds? Is this impact(s) short or long term?

Want this resource and questions in slide format to use in class? Click here!

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Check out this NGPF Activity on Setting Savings Goals!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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