Whether it’s a faulty furnace or a broken bone…how many people are short on the money needed to pay for an emergency?
Answer: 32%
*Ways of payment include cash, funds from savings account, or credit card transaction paid off next statement.
Questions:
- Are you surprised by this number? Why or why not?
- What are some emergency expenses that could amount to $400?
- How do you think the 32% cover this emergency cost if they don’t have money saved to cover it?
- Your friend says “Why would you want to save money when interest rates that banks pay for savings are so low?” Convince them that saving money is a good idea.
Behind the numbers (Federal Reserve Board):
“Relatively small, unexpected expenses, such as a car repair or a modest medical bill, can be a hardship for many families. When faced with a hypothetical expense of $400, 68 percent of all adults in 2021 said they would have covered it exclusively using cash, savings, or a credit card paid off at the next statement (referred to, altogether, as “cash or its equivalent”). The remainder said they would have paid by borrowing or selling something, or said they would not have been able to cover the expense.”
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Our DATA CRUNCH: How Would Americans Cover a $400 Emergency? from our Savings unit fits perfectly with this post.
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Your students can play the NGPF Arcade Game “Spent” to experience what it means to live one unexpected expense away from financial difficulties.
