A new report found nearly six out of 10 Americans don’t have at least $500 in their savings account as a cushion against emergency expenses.
The study by financial website Bankrate showed just 41 percent of Americans surveyed would be able to use savings for an unexpected expense of $500 or $1,000. Twenty percent of respondents said they would use a credit card for the unplanned expense, while another 20 percent would cut spending and 11 percent would borrow or accept money from friends and family.
Jill Cornfield of Bankrate called the situation “a persistent American problem of how you should handle your finances and spending,” CNN Money reported.
Almost half of millennials (ages 18-29) said they had $500 or more in savings, while seniors over age 71 were most likely to use credit cards to cover the expense, Bankrate said.
Last year, only 37 percent of those surveyed said they could cover an extra expense of $500 or more, so this year’s number is a slight improvement.
A full 45 percent of respondents reported they or an immediate family had a major unplanned expense in the previous year, a 2 percent increase from last year’s survey, Bankrate reported.
Financial experts recommend saving 10 to 15 percent of your salary and having at least six months of expenses saved in an emergency fund, Bankrate reported.