A financial emergency can arise at any moment: The car breaks down, the roof springs a leak, or you suddenly need a root canal.
Can you afford to pay for such an expense? Among many of the 38% of adults who have an emergency fund, the answer is a resounding “yes.”
Recently, New York Life surveyed 2,200 adults and asked those who have an emergency fund to describe how much they have tucked away. While a majority of Americans have no emergency fund at all, those who put away a stash of cash have accumulated a surprisingly large amount on average.
Generation by generation, here is how much cash you will find in the typical emergency fund:
- Generation Z: $16,479.24
- Millennials: $29,035.57
- Generation X: $31,040.07
- Baby boomers: $34,033.34
Those amounts are more than adequate to cover many — if not most — financial emergencies. Among those with emergency funds, 76% say they occasionally dip into their pool of cash. They most often do this to pay for:
- Unexpected/emergency expenses: 43%
- Essential costs such as utilities, groceries and housing: 41%
- Paying off debt: 26%
Of course, the situation is far more challenging for those who do not have an emergency fund. Bankrate recently found that just 44% of Americans surveyed would cover an emergency expense of $1,000 or more from their savings, with the rest presumably turning to borrowing in an emergency.
Fortunately, New York Life found 34% of Americans say they plan to build an emergency fund this year, although 47% of these folks admit that they have made little to no progress toward the goal thus far.
If you have no savings put away for hard times, it’s not too late to turn things around. For more, check out “9 Tips for Starting an Emergency Fund Today.”
Add a Comment