Post image for New Report Shows More Americans On The Verge Of Financial Disaster Than Ever Before

New Report Shows More Americans On The Verge Of Financial Disaster Than Ever Before

by Alonzo on February 1, 2012

A new report released yesterday by the advocacy group Corporation for Enterprise Development (CFED) reveals that a large percentage of Americans are living on the financial edge, just one unfortunate event away from disaster.

“Growing numbers of families have almost no savings or other assets to see them through if they lose their jobs or face a medical crisis,” explained Andrea Levere, president of CFED.

The report, entitled the Assets and Opportunity Scorecard, describes 43% of US households as “liquid asset poor,” meaning they have few financial resources that can be quickly converted to cash in case of an emergency.

The results confirm earlier findings that Americans are increasingly living paycheck to paycheck without significant savings.

Last year research by the National Bureau of Economic Research found that one half of Americans surveyed said they either definitely or probably couldn’t come up with $2000 in 30 days. Similarly, a National Foundation for Credit Counseling survey suggested that 64% of Americans don’t have at least $1000 in savings.

But for households of color, the situation is even more grim. Sixty-five percent of households of color are considered “liquid asset poor”, a situation that can leave them at the mercy of predatory title loan and payday lenders.

Perhaps that’s why financial gurus from Dave Ramsey to Suzie Orman all suggest that creating an emergency fund should be a person’s first financial priority.

Yet, experts worry that since many of these “liquid asset poor” families are receiving regular paychecks they may not grasp how close they are to financial danger. As a result, they may not realize the importance of building emergency savings.

You can download a copy of the Corporation for Enterprise Development’s Assets and Opportunity Scorecard report here.

Comments

comments

Comments on this entry are closed.

Previous post:

Next post: