Friday, November 27, 2015

Empty Piggy Banks

How much money could the typical household access within 30 days to cover the cost of a financial shock? According to the Survey of American Family Finances, the median household could get its hands on just $3,000 within 30 days. That's not much of a buffer, and it includes credit cards and help from friends and family.

In the second of three reports on the finances of American households, Pew Charitable Trusts examines the financial assets available to families when they experience a financial shock. That's when, not if. Financial shocks are the norm. Fully 60 percent of households experienced a financial shock in the past year, according to the findings of Pew's first report, available here.

One of the most important resources for weathering a financial shock is liquid savings, which Pew defines as money in a checking or savings account, cash saved at home, and the value of unused prepaid cards. The typical household has only $3,800 in liquid savings, and a substantial one in four has less than $400.

Source: The Pew Charitable Trusts, What Resources Do Families Have for Financial Emergencies?

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