Right now, could you cover a $1,000 Emergency Expense? If not - you're in big company because over half of America can't either. Bankrate's Greg McBride says you shouldn't have to borrow money just to get your car fixed. "Get $1,000 put away for an unplanned expense. That acts as a big buffer between you and high-interest rate debt or having to resort to another option like borrowing from a friend or family."
Having $1,000 in a savings account is getting harder and harder. McBride discusses their survey results on why. "Inflation is definitely stretching household budgets. And for those who are trying to save, half of the households [in our survey] say inflation is causing them to save less." McBride says credit cards and friends are often an uncomfortable solution.
He says, "In lieu of savings we continue to see a very high reliance on borrowing in the event of an unplanned expense. 35% of households say they would have to borrow the money in one fashion or another."
Only 18% of those in the survey without the ready-cash would just spend less till the emergency is paid for. No surprise here, the survey people who make more money have more saved.