Did you know that over 60 percent of Americans would have a hard time coming up with sufficient money to pay for $1,000 worth of emergency expenses? An exclusive poll from the Urban Institute recently revealed that Americans — on average — are in a precarious financial predicament. In fact, 75 percent of American households earning under $50,000 a year would not be able to pay for an unexpected bill of $1,000 dollars. Furthermore, only 67 percent of households earning from $50,000 to $100,000 would be able to pay for an unexpected expense of $1,000 dollars.
Amazingly, even households that are earning over $100,000 a year would have a hard time scraping up the cash to pay for $1,000 worth of surprise expenses. Only 38 percent of these households have that kind of cash on hand. A senior fellow at the Urban Institute said that the state of the average American's balance sheet is particularly surprising in this regard.
According to statistics from the Urban Institute, even a tiny amount of savings can be extremely valuable to a family. Those who have managed to put together $250 to $749 in savings are not as likely to receive an eviction notice and they are not as likely to require public benefits. The fact is, families that do not have any savings are very vulnerable to financial problems. People who don't have savings can soon become homeless or suffer other kinds of problems, like getting deep into debt.
Once debt has accumulated and it is no longer supportable, Pennsylvania residents will have a hard time climbing out of that debt on their own, and this is where bankruptcy proceedings may be helpful. However, having savings is a way to prevent going into credit card debt and needing the bankruptcy process in the first place.
Source: Mint Press News, "Poll: Two-Thirds Of Americans Would Struggle To Cover $1,000 Emergency," May 19, 2016