A recent study from the Federal Reserve reports that almost half of consumers are not able to come up with $400 to cover an emergency expense. In contrast, the study of 5,800 Americans reported that almost one-third of Americans believed their income would increase in the upcoming year. However, many appear to be living one big expense away from financial disaster.
Other findings of the study include:
- Forty-seven percent didn’t have the cash to pay for a $400 emergency expense.
- One in five participants in the study reported spending amounts greater than their income.
- “Underemployment” is a major concern for workers since part-time work often means a lack of benefits, especially health care coverage.
- Nearly one in five Americans has nothing set aside for retirement; 39 percent of report that they have either given no thought or only a little to planning for retirement.
Despite these difficulties, Americans have seen a “mild” improvement in how they view their economic well-being since the recession ended. About 40 percent reported they were either “somewhat” or “much better” off than they were in 2009.
The report reflected that the recovery is only benefiting some. About half of college-educated respondents said they are better off than in 2009; only 37 percent of those without a bachelor degree reported an improved economic situation.
For additional information on the financial fragility of Americans, click here.
- Have students talk to various people about their economic situation compared with five years ago.
- Have students create survey questions that might be used to measure the financial condition of a household.
- What are common measurements of personal economic well-being?
- How might a person take action to improve personal economic well-being?