(C) Common Dreams
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44% of Americans can't pay an unexpected $1,000 expense from savings. ‘We're just not wired to save,’ expert says [1]
['Lorie Konish']
Date: 2024-01-24
Brand X Pictures | Stockbyte | Getty Images
Why Americans are prone to 'financial fragility'
Almost two-thirds of respondents, 63%, say high inflation has left less room to save for emergencies. Meanwhile, just 19% say they are saving more because of high interest rates. "There's a persistence of fragility in American society," said Mark Hamrick, senior economic analyst at Bankrate. "There's more financial fragility out there than I think is widely understood," he said.
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The Covid-19 pandemic, which prompted millions of Americans to seek help from food banks amid widespread layoffs and furloughs, is one example of how a sudden income loss can make it impossible to pay for everyday needs, Hamrick noted. Living paycheck to paycheck has become the norm for many Americans, research has found. That leaves people little to no opportunity to save. To build a cash cushion, the best advice is to start with your current budget and adjust your spending. Where you can, save first and spend second, Hamrick said. Experts generally recommend having three to six months' living expenses set aside to protect against unexpected events. Yet, year after year, surveys show building meaningful emergency savings remains a difficult hurdle for many Americans.
How to reframe how you think about saving
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[1] Url:
https://www.cnbc.com/2024/01/24/many-americans-cannot-pay-for-an-unexpected-1000-expense-heres-why.html
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