Most Americans can’t afford a $1,000 emergency: survey

(KTLA) — A $1,000 unexpected emergency expense can upend the lives of more than half of Americans, according to a new study.

The survey was conducted by bank ratea financial analysis and comparison site.

Bankrate found that only 44% of Americans surveyed could afford an emergency expense of $1,000. This figure is actually up 1 percentage point from the previous year, the company said.

Fifty-six percent of Americans who were unable to weather the storm said they would deal with an unexpected emergency attack differently. Most (21%) said they would use a credit card, 10% would borrow from a loved one and 4% would take a personal loan. According to Bankrate, only 16% of respondents said they would cut back on spending to deal with an unexpected emergency expense.

Mark Hamrick, the site's senior economic analyst, said many Americans are “walking on thin ice” when it comes to emergency spending.

Also discussed was the ever-present topic of inflation and price increases.

Almost two-thirds (63%) of Americans say inflation is reducing their emergency savings. But on the other hand, 19% said they were actually saving more for emergencies, especially because of rising interest rates that are beneficial to those who put extra money in their savings accounts.

“Inflation is a major barrier to further progress on the savings front,” Hamrick said. “Fortunately, higher interest rates have also made returns on savings more generous.”

And if inflation and unexpected emergencies aren't scary enough, the prospect of losing your job is also a source of stress for many Americans.

If they suddenly lost their job, two-thirds of those surveyed said they would worry about how they would be able to cover their immediate living expenses over the next month. Of these, 42% responded that they were “very concerned.”

Despite these fears and stressors, Hamrick said there is room for optimism.

“We certainly dodged the proverbial bullet as the well-predicted recession of the past few years did not materialize,” he said. “A still-robust job market continues to provide a foundation of savings opportunities, supported by some of the highest savings returns in years. Now is the time to prioritize emergency savings and prepare for the unexpected. .”

The national survey was conducted using a combination of online and telephone responses, and more than 1,000 adults were interviewed, Bankrate said.

For more information on our findings and methodology, please visit click here.