A new study finds that 3 in 5 Americans are living so close to the vest that they don’t have enough money put aside for emergency spending.
According to The Wall Street Journal, a report by Bankrate banking analyst Claes Bell finds that, “a solid majority of Americans say they have a household budget, but too few have the ability to cover expenses outside their budget without going into debt or turning to family and friends for help.”
Only 38 percent said they had enough extra money in the bank to pay for emergencies such as car repair bills, visits from plumbers, or small medical problems.
WSJ reported that 26 percent would have to reduce spending elsewhere to be able to afford to cover an unexpected expense, 16 percent said they would have to borrow money from friends or family, and 12 percent would be forced to add the expense to a credit card, thereby growing their debt.
“You hate to see so many people who are one relatively modest financial emergency away from a downward spiral,” Bell said.
This shows that, despite the Obama administration’s claims that the president “fixed” the economy, the larger number of Americans are living paycheck-to-paycheck and aren’t doing well at all.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at email@example.com.