Nearly 44% of American households are one emergency away from financial ruin.
That means they don’t have enough savings to cover basic living expenses for three months if something unforeseen happens such as losing a job or falling sick, according to a recent study by the Corporation for Enterprise Development. Almost a third of Americans have no savings account at all.
“These families have had to prioritize today’s expenses over tomorrow’s goals,” said Andrea Levere, the group’s president.
California ranks 38th among all states for the ability of its residents to achieve financial stability, the report says. Those living in the Golden State are bedeviled with an average $13,825 in credit card debt and high housing costs.
Many people living precariously have jobs. About 75% are working full time, and more than 15% are earning middle-class incomes of more than $55,000 a year, according to the report.
But despite steady jobs, many of those surveyed are surviving paycheck to paycheck, trying to cope with the recession’s aftermath; one emergency could tip them over “the edge of financial disaster.”
Possible reasons for their lack of savings? Experts say many factors could be at play, including stagnating wages, rising prices and high credit card debt.