Most American can't afford Surprise Expense

A $500 surprise expense would put most Americans into debt

While the jobless rate is down and wages are up, most Americans nevertheless remain one misstep away from a financial crisis.

Fifty-seven percent of Americans don’t have enough cash to cover a $500 unexpected expense, according to a new survey from Bankrate, which interviewed 1,003 adults earlier this month. While that may appear dire, it reflects a slight improvement from 2016, when 63 percent of U.S. residents said they wouldn’t be able to handle such an expense. The improvement reflects the stronger U.S. economy, but is still far from ideal, Bankrate.com said.

The findings shed light on how many households continue to struggle with their basic finances more than seven years after the official end to the recession. Despite steady job growth during the Obama administration, wages have been slow to recover, with the typical American household still earning 2.4 percent below what they brought home in 1999, when income peaked. At the same time, costs for essentials such as housing and child care have surged faster than the rate of inflation, placing stress on household budgets.

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