One-third of Americans cannot cope with an economic shock | MCUTimes

One-third of Americans cannot cope with an economic shock

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Even before the pandemic damaged the U.S. economy, about a third of U.S. families did not have enough money set aside to cope with a “medium-sized economic shock,” according to a study by Stanford and George Washington University.

The study, based on a January 2020 survey, also found that people with some college education were often more vulnerable than those without any due to high debt obligations.

The FINRA Foundation, created by the Financial Industry Regulatory Authority, funded “Financial resilience in America“study conducted just before the financial crisis COVID-19, which began in March 2020. (FINRA regulates all investment firms operating in the United States.)

Ultimately, a huge proportion of America’s diverse population suffers from economic insecurity, and the insecurity and turmoil of the COVID-19 pandemic has only made financial resilience even more critical going forward, the study found.

The study examined three areas: unplanned household spending in 2020; and debt and savings levels for households in 2018.

It found:

►If an unexpected need arose, 27% of households in 2020 and 31% in 2018 said they would not be able to come up with $ 2,000 to deal with the problem.

►In 2018, 37% of households had too much debt.

► Nearly half (46%) of households in 2018 said they did not have an emergency or rain fund that would cover expenses for three months in the event of illness, job loss, economic downturn or other emergencies.

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