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Americans Cannot Afford an Emergency Without the Financial Security of Stimulus Checks

A study of 1,600 working individuals found that 30 percent have no emergency money set up for unforeseen expenses two years after Americans were put on lockdown due to the COVID-19 epidemic. If 40% of the currently unemployed population were included, the figure would almost certainly be higher.

According to the poll, 45 percent of people with a family income under $50,000 have no emergency savings conducted by The Bipartisan Policy Center, the Funding Our Future alliance, and Morning Consult. For individuals with a household income of $50,000 to $100,000, the percentage reduces to 26%. On the other hand, Americans had saved around 36% of their stimulus money by October 2021.

Surprisingly, 12 percent of people earning more than $100,000 do not save for an emergency, indicating that financial instability affects even middle-income working adults. Some respondents who said they didn’t have emergency funds in a checking or savings account also said they had money in a retirement account that they could access in an emergency.

About a third of working adults are “very” or “extremely” concerned about their capacity to cover a $400 emergency charge without using a credit card or tapping into their retirement account. At the same time, 8% say they can’t afford it.

Americans Cannot Afford an Emergency Without the Financial Security of Stimulus Checks (1)
Americans Cannot Afford an Emergency Without the Financial Security of Stimulus Checks

According to the report, further investigation revealed that 22% of Americans with emergency funds have less than $250 in their bank or savings account. 35 percent of working Americans had $1,500 or more in savings, according to optimistic estimates. However, that may not be sufficient to cover living expenditures. Thirty percent stated they could afford their expenses for a month or less if they lost their work, while only 15% indicated they could cover them for a year or longer.

Another major conclusion was that 42% of working Americans are financially insecure, “somewhat” or “extremely.” It’s not only that they’re unprepared for a disaster. According to the survey, 39% of working individuals had difficulty covering personal expenses like housing, power bills, and groceries in the previous 12 months. As a result, 14% of those polled indicated they borrowed money from their retirement account or took money out of their retirement savings to cover the expenditures.

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Borrowing against retirement might leave people short on finances when retirement approaches, especially with rising interest rates and a collapsing stock market. Similarly, using credit cards to pay for unexpected expenses could leave them with even more outstanding debt.

Read More:- 65.1% of Kentucky Residents Used Stimulus Funds for Basic Expenses!

The BPC survey proposed the notion of employer-sponsored emergency savings accounts, with money taken directly from employees’ paychecks, to address financial instability. Working Americans were enthusiastic about this potential solution, with 61% stating they would contribute to it in addition to their 401(k) or other employer retirement account.

Read More:- Update on the Fourth Stimulus Check: Some Americans Are Eligible for More Money

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