NEW YORK (MainStreet) — If you needed money in an emergency, would you be able to scrounge up a few thousand dollars on short notice? If the answer is no, take heart—you’re in good company.
Roughly 28% of Americans said they would be unable to come up with $2,000 in a month’s time if they needed it, while another 22% said they would probably be unable to do so during that time period, according to a new report from the National Bureau of Economic Research. Just one quarter of those surveyed expressed complete confidence that they could get that much money if necessary.
While the $2,000 figure seems arbitrary, the researchers picked it as a ballpark figure that the average consumer might incur for an unexpected expense, whether it be a hospital bill or the cost of fixing up a car. Indeed, for many families, the amount one should have stowed away in emergency funds is far greater, as experts recommend one typically have five to six months’ worth of living expenses set aside.
“If we consider the respondents who report being ‘certain’ or ‘probably not’ able to cope with an ordinary financial shock of this size, we find that nearly half of Americans are financially fragile,” the researchers write.
So what would these families do if they faced a situation where they absolutely needed the money?
According to the report, consumers are most likely to tap into their savings for funds, but if that proves to be inadequate, their next options are asking for help from friends and family, taking out more credit or working extra hours. About a fifth of Americans would even go so far as to sell off their possessions or, worse, take out a payday loan in order to come up with the money.