Less than half of Americans have a rainy day fund that could cover three months’ worth of expenses in case of job loss or other emergency, according to a new report by the Financial Industry Regulatory Authority.
That’s an improvement from the 40 percent who had such a fund in 2012, but it still leaves both consumers and the broader economy at risk. “Individuals without this emergency savings lack a buffer against unexpected financial shocks, threatening their personal financial stability, as well as decreasing the stability of the economy as a whole,” the report says.
One reason that Americans are lacking in savings is that many aren’t making enough money to cover their current expenses. Among those surveyed, 38 percent said they just broke even each year and 18 percent said that they were spent more than they made last year. Nearly one in five Americans say that they occasionally overdraw their checking accounts.
Without a buffer to manage unexpected expenses, many Americans have run into issues managing their current debt obligations. More than a third (37 percent) of Americans with student loans have been late with a payment in the past year. Sixteen percent of mortgage holders said that they’d been late on a mortgage payment at least once. And more than one in five Americans has overdue medical bills.