Myth of the Middle Class: Most Americans Donâ€™t Even Have $1,000 in Savings
Halibutboy Flatfish stashed this in Money cash
Forbes has reported that 56% of Americans have less than $1000 of savings, and 63% do not have enough to cover a $500 emergency.
Here's the Forbes article:
The stat comes from Bankrate, and people often cover that emergency with credit cards:
According to a brand new survey from Bankrate.com,Â just 37% of AmericansÂ have enough savings to pay for a $500 or $1,000 emergency. The other 63%Â would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event.
Itâ€™s not news that Americans are terrible savers. In November, Pew Charitable Trusts reported thatÂ oneÂ in threeÂ American families have no savings at all. In December,Â Magnify Moneyreleased the results of a studyÂ that found thatÂ 56.3% of people have less than $1,000 in their checking and savings accountsÂ combined. Sensing a trend? You should: Americaâ€™s saving struggle has been a problemÂ yearÂ afterÂ yearÂ afterÂ year.Â
But this latest survey is particularly striking because of the implications it carries.
â€śFive-hundred dollarsÂ is enough money that it could be catastrophic if youâ€™re really living on the edge and donâ€™t have enough moneyâ€ť to cover that unplanned cost, Bankrate senior investing analyst Sheyna Steiner said in a phone interview.Â â€ťI did wonder what would happen if it was $10,000, what would the answer have been then?â€ť
AÂ $10,000 emergency is a somewhatÂ rare occurrence for families of moderate income â€” but itâ€™s hardly unheard of. According to the Pew Charitable Trusts analysis, the median size of a familyâ€™s most expensive financial â€śshockâ€ť (as they call it) in a year is $2,000.