When that “rainy day” comes, some of us have not saved for it, and will be in deep money trouble, even for an expense of $400.
That’s according to research by Rice University’s Kinder Institute for Urban Research.
Researchers found disturbing numbers of people making less than $100,000 a year would have the cash available for an unexpected $400 expense.
“So many people are living paycheck to paycheck,” explained business and money expert Derrick Kinney, “And the unexpected expense comes up, it forces them to go to the credit card.More and more people have less and less in checking. And they typically have nothing in savings.”
Kinney says most of us have plenty of expenses just waiting to jump up on us. “It’s going to be in your house, or your automobile,” he said. “And now you’re faced with ‘oh my gosh, I don’t have the money to cover this.’”
Our preparedness varies from place to place.
In Harris County, which includes the city of Houston, 45 percent of people surveyed say they wouldn’t have the money for a surprise $400 expense.
In Montgomery County, that number was 37 percent.
In Fort Bend County, 34 percent.
Kinney says families need to prepare for big expense by cutting back on small ones, like brand name groceries, designer coffee, or streaming video. He suspects we’re seeing the consequences of a failure to economize as inflation has taken its toll. “the cost of eggs and bacon and milk have all gone up. All the ‘extras’ cost more. But they want to live this so-called ‘middle-income life.’ It’s costing more than what their paycheck will allow.”
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