This has largely been debunked -- the questions asked were not about their access to sufficient funds. For example, the median American household has $1000 per month in disposable income ("beer money") after all typical living expenses. This fact alone should immediately raise questions about the assertion that the majority of households can't afford $500 in one-time cost, emergency or not.
The major source for this assertion is that most American's don't have $500 in savings accounts. Which is true. What is also true is that a large percentage of Americans with plenty of emergency cash don't even have a savings account -- it is an anachronism from a bygone era. Most Americans no longer own savings bonds either.
My emergency cash is in a checking account, like many Americans, so by the measure used in this article, I am completely broke.
A Bankrate[1] survey found that only 37% of respondents could cover a <=$1,000 emergency with savings (note: savings, not a "saving's account"). They did, however, add that another 23% could cover the expense by spending less on other things.
Given that, I'd say a large percentage of Americans do not have plenty of emergency cash. That's not to say most of America is "one paycheck away from the street" like the parent comment quoted...
A Bankrate[1] survey found that only 37% of respondents could cover a <=$1,000 emergency with savings (note: savings, not a "saving's account"). They did, however, add that another 23% could cover the expense by spending less on other things.
The exact wording of the question is going to have a significant impact on the results and what they mean. In the real world, if I incur an unexpected $500 expense I'd put it on my credit card, which would get automatically paid from my checking account at the next billing cycle. It's not clear if that would incorrectly categorize me as not being able to afford it.
Like the other study, you're mixing up the phrasing. The question they asked was 'How would you pay for an unexpected expense'? It was not, 'Could you for an unexpected expense using just your savings'?
I'd be in the 'reduce spending' camp since I try to avoid touching my savings.
The 37% makes sense, as that almost perfectly aligns with disposable income data if you assume relatively few people save their disposable income at that percentile (also likely true). Most people I know in that zone would put it on a credit card.
Headline: Most Americans are one paycheck away from the street
Subheading: Some 63% of people can’t deal with a $500 emergency
The website is CBS Market, fairly respectable, draws on several plausible studies.
Link: https://www.marketwatch.com/story/most-americans-are-one-pay...