(Newswire.net — January 17, 2017) — Nearly six in 10 Americans could not pay a sudden expense between $500 or $1,000, according to a new report by Bankrate, CNN Money reports.
The finding came after a survey which showed that only 41% of adults reported they would be able to pay a sudden bill up to $500.
The survey results show that slightly more than 20% of Americans would cover the unexpected expense by putting it on their credit card, 20% would cut their spending and 11% would seek assistance by borrowing the funds.
According to Jill Cornfield, a retirement analyst for Bankrate, “this is a persistent American problem of how you should handle your finances and spending”.
Now, if you think these statistics are bad, according the report this is actually an improvement comparing to results from 2014 that showed only 37% of Americans could afford to lose $500 without any consequences.
According to the report, Millennials were the most financially prepared to take a financial blow. Around 47% of those aged 18-29 said they have $500 or more in savings, which is an increase from 33% in 2014.
Financial experts warn that if there is no saving to amortize sudden unexpected expenses, the cost could be much higher after reaching for solutions with interest, which further lead to financial insecurity.
The higher cost of living and shrinking income, however, present the reality for nearly half of Americans, who reported that they or their family members faced a major financial expenditure in the past year.
“If you are human, have a pet, kids, a house or a place to live, something is going to happen that will cost you money,” said Bankrate analyst, Jill Cornfield. Although many Americans live paycheck to paycheck, Cornfield is convinced there is always room to cut back on spending.
“There are ways to track your spending and look where your money is going and find the holes and gaps,” she said, adding that some of the areas to cut back are daily coffee, alcohol or vacations.
The truth is, however, that cutting basic things such as daily coffee or vacation would make us no different than robots, working as company’s slaves for the benefit of the privileged handful of brutally rich individuals.
According to Fortune, the world’s 8 richest men are now as wealthy as half of the world’s population, which is a drastic change since 2010 when combined assets of the 43 richest people were equal to the wealth of the poorest 50%.