Most Americans cannot afford a $1K emergency expense
Bank of America CEO and Chairman Brian Moynihan discusses the Feds rate hikes, 2024 consumer strength and big bank regulation.
A majority of Americans say a $1,000 emergency expense would be too great of a hit to their savings and that they could not afford it, according to new data released Wednesday.
Bankrate's latest survey results found 56% of U.S. adults lack the emergency funds to handle a $1,000 unexpected expense and one-third (35%) said they would have to borrow the money somehow to pay for it.
Most U.S. adults say they can not afford to pay a $1,000 emergency expense from their savings. (iStock / iStock)
Of those, 21% said they would likely put such an expense on a credit card, while 10% said they would borrow the funds from a family member or friend, and 4% said they would take out a personal loan. Sixteen percent said they would reduce their spending in other areas to cover the bill.
«All too many Americans are playing with fire when it comes to their personal finances in the sense that they don’t have more in emergency savings,» said Bankrate senior economic analyst Mark Hamrich. «Inflation has been a key culprit standing in the way of further progress on the savings front.»
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Perhaps unsurprisingly, the older the respondent was, the more likely they were to say they could pay for a $1,000 expense from their savings.
Fifty-nine percent of baby boomers (ages 60-78) said they could handle a $1,000 expense, followed by 43% of millenials (ages 28-43), 36% of Gen Xers (ages 44-59), and 31% of Gen Zers (ages 18-27.)
Customers shop at a grocery store in the Brooklyn borough of New York on Dec. 13, 2022. Inflation has risen more than 17% since January
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