Two Surveys Show that Americans Need Financial Overhaul
Two recent surveys suggest that Americans need a finance habit overhaul. A majority of consumers surveyed are not financially prepared for a medical emergency, with 28% saying they have less than $500 saved for medical expenses, and 51% indicating they have less than $1,000, according to an April 2012 Aflac Work Force Report.
When asked how they would pay for an unexpected illness, more than half (57%) of respondents say they'd have to tap savings, 30% would use a credit card, and 19%—nearly one of five—would have to withdraw funds from 401(k) plans.
Of those surveyed, 58% admit they have no financial plan to handle a large, unexpected cost, while only 8% say they're financially prepared.
Half, 51%, say a major reason for not setting money aside for emergencies is that they are trying to pay down debt.
In a related survey, when asked to describe the state of their personal finances, 80% of more than 1,400 respondents admit their finances are in need of a major overhaul, according to a poll hosted on the National Foundation for Credit Counseling (NFCC) website.
Half of respondents are not setting money aside for emergencies because they are trying to pay down debt.
"This statistic parallels the findings of the recent NFCC Financial Literacy Survey, in which 80% of adults indicated they could benefit from additional advice and answers to everyday financial questions from a professional," says Gail Cunningham, NFCC spokesperson. "It is encouraging that people recognize how perilous their financial situation has become. Now they need to take action to resolve the problem and keep it from spiraling out of control."
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