Even before the pandemic hurt the U.S. economy, about one-third of American families didn’t have enough money set aside to cope with a “mid-sized financial shock,” according to a Stanford and George Washington University study.
The study, based on a January 2020 survey, also found that people with some college education were often more vulnerable than those without any, due to high debt obligations.
The FINRA Foundation, created by the Financial Industry Regulatory Authority, funded the “Financial Resilience in America” study that was done just before the COVID-19 financial crisis that began in March 2020. (FINRA regulates all securities firms doing business in the United States.)
Ultimately, a huge proportion of America’s diverse population suffers from financial insecurity, and the uncertainty and turmoil of the COVID-19 pandemic have only made financial resiliency even more critical moving forward, the study found.
The study examined three areas: Unplanned expenses for households in 2020; and debt and savings levels for households in 2018.
It found:
►If an unexpected need arose, 27% of households in 2020 and 31% in 2018 said they would not be able to come up with $2,000 to cope with the problem.
►In 2018, 37% of households carried too much debt.
►Nearly half (46%) of households in 2018 said they didn’t have an emergency or rainy day fund that would cover expenses for three months, in case of sickness, job loss, economic downturn, or other emergencies.
While…
