A recent Federal Reserve Board report aimed to paint a picture of American household finances following the recession—and it’s bleak, especially in situations that require cash.
That’s likely because Americans have little savings: 57% of those who had savings prior to 2008 said they used up some or all of it following the recession, according to the report.
A recent report by bankrate.com showed that 1 in 4 had no savings at all.
Declining savings makes emergency expenses more difficult to cover.
According to the survey, only 48% of respondents would be able to cover an emergency expense of $400 without having to sell something or borrow. About 43% said they wouldn’t be able to afford a major medical expense out of pocket. Conducted by marketing research firm GfK, the survey asked 4,134 American adults about a wide range of economic details, including retirement savings, educational debt, medical expense and homeownership.