Although the US economy is strengthening, many Americans have a hard time saving – even for unexpected emergencies.
The Federal Reserve Board released its report on economic well-being of US households on Thursday, and found that only 61 percent of Americans could cover an unexpected $ 400 expense with cash, savings, or a credit card that was paid at the next statement. The Fed noted that the figure is a modest improvement over its findings from the previous year.
Meanwhile, more than a quarter of people would either borrow or sell anything on foot $ 400 bill, while 1
"Relatively small, unexpected expenses, such as a car repair or replacement of a broken appliance, can be a hardship for many families without sufficient savings," the report noted.
17 percent of the people cannot pay their monthly bills in full. Another 12 percent of the people would not be able to cover the monthly bills if they met an unexpected $ 400 expense.
That's bad news, considering that 20 percent of people said they had a "big, unexpected" medical bill to pay over the past year and 25 percent skipped the necessary medical care because they couldn't afford the costs.
When asked about their general level of economic comfort, three-quarters of Americans said they either lived comfortably or did well – a 13 percentage point increase over 2013.
Savings problems even come when the US economy strengthens. First quarter gross domestic product (GDP) expanded to 3.2 percent annual interest rate in the first quarter, while disposable income increased $ 116 billion. Unemployment is also low for half a century.
It's not just emergency savings that people are struggling with. According to the Fed data, a quarter of non-retired adults have no retirement or retirement savings.
CLICK HERE TO INCREASE BUSINESS APP
Meanwhile, lawmakers are looking to help Americans save for retirement, as the house approved a bill on Thursday that would make changes to popular savings plans, such as 401 (k) and IRAs . It will also encourage companies to offer employee retirement plans, including some part-time employees.
Fed's findings are based on the economic experiences of 11,000 respondents, which were examined in 2018.