44% of Americans Are One Emergency From Financial Ruin
March 9, 2013 Leave a comment
My sister recently posted a comment on this post, where another reader mentioned he felt most homeless are that way because of substance abuse.
While I have not found data to substantiate this claim, I did come across an LA Times article reporting that nearly 44% of American households are one emergency away from financial ruin.
As I’ve come to realize through my time with the homeless, it seems that most of the folks I meet didn’t have enough in savings to cover their basic living expenses at the time of their “event” — and according to this article, they’re not alone. Of the 44% that are one step away from the edge, most do not have savings capable of covering three months of living expenses. This means that losing a job, becoming ill, or losing their family support system can be devastating.
Speaking of savings: according to a study by the Corporation for Enterprise Development, nearly a third of Americans have no savings account at all.
Of households that are on the edge, about 75% are working full-time, with slightly over 15% earning a middle-class income of more than $55,000 a year. Even so, they’re one paycheck away from the edge.
What do you think? Does it seem likely that nearly half of all American households are that close to the edge? If so, what can be done about this?