Are you an emergency away from financial ruin?
The report was startling, but then again, maybe it shouldn’t have been: Almost 44 percent of American households are just one emergency away from financial ruin. That story from the Los Angeles Times was part of Sunday’s Gazette Marketplace section front.
That means almost half of us don’t have enough savings to cover basic living expenses for three months if we fall ill, lose a job or face some other unforeseen crisis. That’s according to a recent study by the Corporation for Enterprise Development.
Many of these people actually have full-time jobs, and more than 15 percent of them earn middle-class incomes of $55,000 a year. Yet almost one-third of Americans have no savings at all and prioritize today’s expenses over tomorrow’s goals.
Experts suggest that stagnant wages, climbing prices and high credit-card debt are all factors in this problem.
My wife has retired, and I’m in my mid-50s. So we’ve had time to save some money. I’m confident that, when also factoring in reduced spending, we could weather a three-month financial crisis.
What about you? Do you feel you’re living on the edge?