A total of 64 percent of Americans lack the means to pay for a $1,000 emergency, a new survey by the National Foundation for Credit Counseling (NFCC) reports.
The survey, released earlier this week, says the majority of people living in the United States can’t afford to pay an unexpected $1,000 in case of any emergency.
According to CNN, only 36 percent of the 2,700 people who completed the survey said they are financially prepared for any emergency. Those who couldn't afford a $1,000 expense said they would have to borrow money or get advance cash via credit card to cope with any unforeseen emergency.
The report says 17 percent of the respondents would borrow money from family or friends and the same number of respondents said they would free funds for meeting an emergency by ignoring other financial obligations.
A total of 12 percent of respondents said they would need to sell or pawn assets to get the money for dealing with the emergency, while 9 percent said they would seek a loan for the same purpose.
Commenting on the survey report, NFCC’s spokeswoman Gail Cunningham called the situation “alarming,” the Daily Mail reports.
Cunningham said such an emergency can throw affected people into financial distress, adding that getting money from sources other than one’s own savings was a “red flag,” and that it was important to get to the root of this problem.
Digtriad quoted Credit Counselor Shenell Thompson as saying people often fail to realize how to create a budget. Working with one of his client's families, Thompson advised that overtime income should go into emergency savings. To him, the best way to save money is by taking money directly out of one’s paycheck.