Only 40% Have Emergency Savings!

March 11, 2007


I ran across an interesting CNN article on emergency savings.

Here are the vital statistics:

Only 40% of Americans have a separate savings for emergencies

Only 19% of those aged 18-24 have separate emergency funds

Only 23% of people with less than $25,000 in annual household income have them

31% of African Americans and 32 percent of Hispanics have them

58% of those with annual income of $75,000 or more have emergency funds

This is some sad news indeed on the financial state of this country. However, it is pretty expected since this is a debt nation with a negative savings rate. We are spending more than we’re earning and borrowing the rest. The sad fact of this survey is that the people who need an emergency fund the most, don’t have them. That’s why people have to resort to rip-offs like payday loans and credit card advances!

Another interesting thing to note about the survey was that 81 percent of those surveyed believed their rainy-day savings would be sufficient to cover emergency expenses this year. Are we delusional or what? How can 81% say that their emergency fund will cover emergencies when only 40% even have one? We really need to change our thinking in order to get into financial shape as a nation. It’s going to be hard, because it’s so ingrained in the culture, but it isn’t impossible. If you can change, and then teach your children the right way to manage money, we can change as a nation. It will be a slow process, but it begins with you. God Bless!

Here’s the link to the CNN article.

3 Responses to “Only 40% Have Emergency Savings!”

  1. Terry Says:

    Thinking like the above boggles my mind sometimes. Households with less than $25,000 annuak income, by definition, don’t have much income. So it’s kinda silly to lament their lack of emergency funds. What did you expect? D’oh!

    I earn my state minimum wage and have student loan debt. How much did you expect me to sock away in an emergency fund. (And so much for student loan debt being good debt.)

  2. It’s not impossible. I actually make less than $25,000 a year and have student loan debt (still in school) and still have an emergency fund. It is possible even with a small income. It just takes a little patience.

    Sorry, I have to be harsh here. What are you doing in a minimum wage job with a college degree? That’s what boggles my mind.

  3. Terry Says:

    I graduated in the middle of a recession, with a liberal arts degree (planned to go to law schooll but couldn’t afford it and declined to borrow up to my eyeballs when I saw many lawyers not able to make a living in law), in a Rust Belt state from which two-thirds of new graduates were fleeing (for jobs elsewhere, as the regional economy was in the tank). I did have a minor in computer science but everything I learned was on mainframes (COBOL, anyone?) and the emerging PC changed everything. So I went to work for someone I knew who was starting up a consultancy and list vending business, doing specialized data entry which I hated. As he had an endless supply of cheap labor (college dtudents) the wages weren’t exactly great (I never earned more than $17K in one year, and that was with a supplemental part time job) and did that for 20 years until an extended illness with (temporary) neurological complications left me unable to work and without income (and thus unable to pay the rent) and I had to relocate to live with relatives until I could go back to work. I’m back to work, this time in a convenience store, which I also hate. The local economy here isn’t so hot, either; there are four college graduates working here and we all make minimum wage. (I was astonished recently to learn that a long-time employee earns only 20 cents above minimum.) So now I am in middle age, without either marketable skills or anything which could be considered career-related experience, and I have no idea how or if I’m ever going to get out of the financial hole I am in.

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