When faced with an unexpected $1,000 expense, more than one-third of Americans would borrow the money, according to a new Bankrate survey. That may include tapping their credit cards, seeking money from friends or family or taking out a personal loan.
Most would not turn to cash savings because they don’t have it, the personal finance website found.
Fewer than half of Americans, 44%, say they can afford to pay a $1,000 emergency expense from their savings, according to Bankrate’s survey of more than 1,000 respondents conducted in December.
That is up from 43% in 2023, yet level when compared to 2022.
“We’re just not wired to save,” said Brad Klontz, a certified financial planner and expert in financial psychology and behavioral finance. Our brains are instead programmed to focus on our immediate needs.
Can you expand?
Do I try to save money or
Do I pay my bills, rent, and buy food? The money I “save” is so I can top up my gas tank on the week I don’t get paid.
Also, you can’t just “save” money in the sense of a savings account. Inflation is too insane, any money in a savings account is worth less then what it was last year, and savings accounts % returns have gone down to 1-2%.
If you want to “save” money in today’s time, you need to invest the money, and that takes more time and effort. Holding onto money is simply detrimental in today’s times.