Earlier this month, Lazy Man and Money quietly turned 10 years old.
The economy has changed a lot in that time. If I had to pick one highlight, it would be when the entire banking system collapsed when I went on vacation to Australia/Thailand for a month. (Just this one time, I'll purposely confuse causation and correlation, because it makes for a better story.)
However, one thing hasn't changed... many Americans are unprepared for relatively small unexpected emergencies such as a car repair.
The latest information is highlighted in this article in The Atlantic. The article cites that the a Federal Reserve Board survey shows that 47% of Americans said that they'd cover a $400 expense by borrowing or selling something.
That sent shock-waves around the news sites that I follow on the Internet.
However, it shouldn't have been a surprise to long-time Lazy Man and Money readers. Last year, I wrote How Much Emergency Fund Should You Have? where I cited this research that 64% of Americans don't have the money for a $1,000 emergency expense.
(I hope that someday, someone will ask about $500 which should come in at over 50%. That way I'll be able to make a simple statement of "Most people don't have $500 in emergency cash.")
The easiest solution is to sign up for Digit, which is a free service that periodically squirrels away small, unnoticeable amounts of money in separate bank account. I signed up last year and actually have saved $4545 in my Digit account. I've been so excited by Digit that I wrote a first review and a second review. Digit is also critical to my favorite money hack.
In short, my top advice is for you to sign up for Digit. Sorry to hit you over the head with this. However, if I can help 47% or 64% of Americans be better prepared for the inevitable emergency, it's worth a couple of paragraphs, right?
There's much, much more going on in the The Atlantic article. I'll be referencing The Atlantic article all week (maybe even two weeks) as it covers.
Tentatively, I plan to write about the author's obstacles to secure his financial future. I also hope to cover the story of a local (to me) high school student who may change the future for my state.
One Response to “Many Americans Can’t Afford $400 in an Emergency”
Next: Why We Fail With Money