If a financial emergency arose in the next 30 days, could you get your hands on $2,000? The National Bureau of Economic Research published a paper based on this simple question. Here is what they found:
- 25% of respondents reported they certainly would not be able to get the money
- 19% said they would have to pawn or sell something, or get a payday loan
With almost half of Americans unable to cover an emergency of this size, the study confirms the fragile nature of many families’ finances. Credit specialists at Lexington Law outline the problems that can be caused by the lack of even a modest amount of savings. Lack of savings causes debt, late payments and, often, credit report damage. All of these things, in turn, cost money and cause more financial havoc. It’s a vicious cycle of poverty that is debilitating.
On a brighter note, there are ways to quickly put a few dollars in the bank to avoid the long-term affects of no savings. Trent Hamm, writing for TheSimpleDollar, posted a helpful article titled, How to Save Money: 100 Great Tips to Get You Started. Perhaps the best tip in the entire list is #100. Interestingly, it has little to do with money, and everything to do with life. It is: Never Give Up!