Savings - 8/27/14 | WYPR

Savings - 8/27/14

Aug 27, 2014

Even five years of economic recovery have failed to lift many families out of bleak financial circumstances.  A recent Federal Reserve Board report indicates that 57 percent of those who had savings prior to 2008 used up some or all of it following the recession. 

A recent report by indicated that 1 in 4 families had no savings at all.  Life becomes even more challenging when there is an economic emergency, whether in the form of a faltering automobile or medical issue.  According to the Federal Reserve’s report, only 48 percent of respondents would be able to cover an emergency expense of $400 without having to sell something or borrow.  About 17 percent said that they would use a credit card and pay back the expense over time. 

Ten percent said that they would sell something.  Four percent said that they would use a payday loan or some similarly structured mechanism.  Eleven percent would borrow from a friend or family member.  Nineteen percent say that they simply would have no way to deal with an emergency expense of $400.  Additionally, about 43% of families indicate that they would not be able to afford a major medical expense out of pocket.