Most Americans don’t have enough in savings to cover a $1,000 emergency expense
If your engine dies on the drive home from work today, or if your child has to be rushed to the hospital for an emergency your insurance doesn’t cover, are you ready to cover the costs?
For 60 percent of Americans, according to a Bankrate survey, the answer is “no.” Most of us would have to break out our credit cards or rely on the help of family and friends to cover an emergency of $1,000 or more.
Why do you need $1,000 in savings?
My family moved from Tennessee to Utah with barely a penny to our names. My wife and I were both fresh out of college, and like something straight out of a Steinbeck novel, we’d packed everything we owned into a used vehicle and lugged it across the country, chasing the promise of a decent-paying job.
Then disaster struck. As we drove 70 miles per hour down an empty highway, a deer leaped out of the bushes and directly in front of our car. We didn’t have a second to react. The deer flipped over our roof, our airbags deployed, and suddenly, we were stranded in an empty patch of Kansas, 30 miles from the nearest town.
By some miracle, we’d survived — but our car hadn’t. As soon as the airbags deployed, we would learn, it was considered “totaled” and the police couldn’t allow us to drive on. And since all we had was liability insurance, nobody was going to help us pay for it.
We’d spent every penny we had paying for the trip to Utah. If we’d had a thousand dollars in savings, we would have been able to pick up a used car on Craigslist or put a downpayment on something that would take us the rest of the way. But we didn’t have anything — and so our only choice was to sign our names on the no-money-down contract the local dealership told us they’d only offer us if we bought a brand new SUV.
We still haven’t paid that SUV off. It eats up almost $400 of our budget every month, and we won’t be free of it for another six years. And all because a deer jumped out in front of our car and we weren’t ready to handle it.
Our story’s rough – but we’re hardly the only ones with one like it. Each year, an emergency hits nearly half the families in America, and if they’re not ready to deal with it, they have to find other ways to pay for it. And usually, that means going deeper and deeper into debt.
The $1,000 Challenge
Putting aside $1,000 isn’t easy for a family living paycheck to paycheck, but that doesn’t mean it’s impossible.
KSL Newsradio’s Dave & Dujanovic are calling on all of their listeners to take the $1,000 Challenge and try to put their money aside. Every Monday through Thursday from 9 to noon, they’ll be sharing tips and tricks to build up that $1,000 buffer – and every Thursday, they’ll be doing something that will make a huge difference in some of their listeners’ lives.
Tune in to KSL Newsradio 102.7 FM / 1160 AM on Thursday, May 16th from 9 a.m. to noon to find out what it is.