When faced with an unexpected $1,000 expense, more than one-third of Americans would borrow the money, according to a new Bankrate survey. That may include tapping their credit cards, seeking money from friends or family or taking out a personal loan.
Most would not turn to cash savings because they don’t have it, the personal finance website found.
Fewer than half of Americans, 44%, say they can afford to pay a $1,000 emergency expense from their savings, according to Bankrate’s survey of more than 1,000 respondents conducted in December.
That is up from 43% in 2023, yet level when compared to 2022.
“We’re just not wired to save,” said Brad Klontz, a certified financial planner and expert in financial psychology and behavioral finance. Our brains are instead programmed to focus on our immediate needs.
Their names are on the titles, they own the homes. Their banks - the mortgage lenders - hold a rights to a lien placed on the property, but they have no title to the property unless they enforce the terms of their lending contract in the event of default.
The owners making 500k may very well be just a few months from foreclosure if they lose their job, but they likely have at least 20% (likely much more unless they bought at a premium two years ago) equity and can probably salvage at least half - even after fees - if they were to become “destitute” and undertook a regular sale of the property. 10% of a million dollars (or more), for most of the country, is still a healthy sum of money.