When faced with an unexpected $1,000 expense, more than one-third of Americans would borrow the money, according to a new Bankrate survey. That may include tapping their credit cards, seeking money from friends or family or taking out a personal loan.
Most would not turn to cash savings because they don’t have it, the personal finance website found.
Fewer than half of Americans, 44%, say they can afford to pay a $1,000 emergency expense from their savings, according to Bankrate’s survey of more than 1,000 respondents conducted in December.
That is up from 43% in 2023, yet level when compared to 2022.
“We’re just not wired to save,” said Brad Klontz, a certified financial planner and expert in financial psychology and behavioral finance. Our brains are instead programmed to focus on our immediate needs.
“live paycheck to paycheck.”
That may be generally true, but they likely have a bunch of equity in their homes, and I’ll bet their retirement accounts are generous. Sure, there are some who just spend everything, but most people at that level are already “hiding” as much money as they can from taxes.
How many people actually own homes?
What do you mean by own? Own as in 100% paid for - not too many. Own as in their name is on the deed, but most of the value belongs to the bank - more than half of the US.
Lots of people don’t own their homes in any sense it’s my point. They rent.
But they own portions of it. It isn’t like it’s 100% the bank’s house until the last payment is made. You build equity that is in fact yours. And in the last decade you could have made a killing if you’d bought a house at the right time. We sold a house last year for almost twice what we paid for it 7 years before. The bank doesn’t get any of that extra money.
The ones making $500k a year own multiples.