Apparently, almost half of all Americans would have serious trouble paying for a sudden, unexpected $2,000 expense.
This is the finding from a recent study that was profiled in a recent Wall Street Journal article that suggested that nearly half of Americans are what they’re calling “financially fragile”. The article, which links to a paper that serves as the source for the topic, reveals that many people just don’t have the ability to deal with unexpected costs and would have real problems handling such a situation.
The question being asked centered on the ability to get $2,000 in the next month in order to cover an unexpected expense. All told, almost 50% of the surveyed respondents indicated problems, in that that they would either be:
- ‘probably unable’ to get the money (22.2%), or
- ‘certainly unable’ to get the money (27.9%)
The remainder was either ‘certainly able’ or ‘probably able’
The article goes on to describe that when probed about methods to get funds to pay, many of those who at least might be able to pay (thus excluding the ‘certainly’ unable to pay group noted above) indicated that they would have to resort to suboptimal tactics such as pawning possessions, getting help from family or friends, borrowing money, etc. This is to the tune of over 18% of the total – again, in addition to the 27.9% that would be certainly unable to get the $2,000 within a month.
What a stressful life that must be, and I’m glad I’m not in that position and hope you aren’t either.
The thing is, these so-called ‘unexpected’ costs aren’t really unexpected at all. Things most likely will happen that not be according to optimistic plans. It’s just the way it is. Your car may need major repairs when you least expected it, your roof may need work, you may have an unexpected medical bill, and so on. Stuff happens, so it’s best to get a better handle on what’s truly unexpected and what’s not, and also to plan for the genuinely unforeseen events.
I suspect that many people do have very genuine, legitimate reasons for being in financial distress – and have real difficulties getting themselves in a better place. I have compassion for those of you in such a position.
For many others, I wonder if it’s a matter once again of not being able to discern wants from needs when spending money and organizing their financial lives, so that they just can’t pay for such expenses that can and will come up.
Having savings of even such a basic level of $2,000 isn’t a want, it’s a need for adults in this country. Yet most people couldn’t handle it. Scary stuff indeed.
Personally, if something like that came up, I’d pull it from my savings account. Not happily, but that’s why the savings are there – for situations such as this. Things happen, and it’s best to plan accordingly. Now, if an expense got a fair amount higher, I would think about using emergency funds. But again, it’s there because we all need one. I paid the price by saving for years and ‘doing without’ so I could protect myself to a reasonable degree in case of emergency.
What about you?
If you were hit with an unexpended $2,000 expense that was coming due within a month, how would you rate your ability to pay it – Certainly Able, Probably Able, Probably Unable, or Certainly Unable?
If you answered one of the first three choices, how would you get the money?