By Michael Snyder | Economic Collapse Blog
Nearly two-thirds of all Americans are completely and totally unprepared for the next economic crisis. As you will read about below, a new survey has found that only 38 percent of Americans have enough money on hand to cover “a $500 repair bill or a $1,000 emergency room visit”. That essentially means that 62 percent of the people in this country do not have an emergency fund. Even after the extremely bitter financial lessons that millions of Americans learned during the last recession, most of us are still choosing to live on the edge. That is utter insanity, and when the next major economic downturn strikes most people are going to find themselves totally unprepared.
The number one thing that you need to do to get ready for the coming economic collapse is to build up an emergency fund.
I know that is not the most “sexy” piece of advice in the world, but it is the truth. Just think about it. During the last recession, millions of Americans suddenly lost their jobs. Because they did not have any cushion to fall back on, millions of them also suddenly could not pay their bills and their mortgages. Foreclosures skyrocketed and countless families went from living a very comfortable middle class lifestyle to being out on the street in very short order.
And now because the people of this country have been so foolish it is going to happen again.
Because of my website, people are constantly asking me what they should do to prepare for the coming economic collapse.
I think that they expect me to say something like this…
“Sell everything that you possibly can and buy gold and silver, go purchase a llama farm, and dig a bunker where you can bury 10,000 cases of MREs.”
Not that there is anything wrong with those kinds of preparations.
But before you do anything else, you have got to have an emergency fund. My recommendation is to have an emergency fund that can cover at least six months of expenses in case something happens.
Sadly, a solid majority of Americans do not have any emergency cash at all. The following comes from the Wall Street Journal…
Only 38% of those polled said they could cover a $500 repair bill or a $1,000 emergency room visit with funds from their bank accounts, a new Bankrate report said. Most others would need to take on debt or cut back elsewhere.
“A solid majority of Americans say they have a household budget,” said Bankrate banking analyst Claes Bell. “But too few have the ability to cover expenses outside their budget without going into debt or turning to family and friends for help.”
The survey found that an unexpected bill would cause 26% to reduce spending elsewhere, while 16% would borrow from family or friends and 12% would put the expense on a credit card. The remainder didn’t know what they would do or would make other arrangements.
And of course this is not the only poll that has come up with these kinds of results. In fact, a Federal Reserve survey from last year produced similar numbers…
Read full report via Economic Collapse Blog