LendingTree released its survey on how Americans would pay for an emergency expense and how they’ve paid for them in the past. The survey found that more than half of Americans can’t cover a $1,000 emergency with savings.
Forty-eight percent of Americans could cover a $1,000 emergency
When faced with an emergency expense, tapping savings to pay for it in cash is the most popular strategy. Older respondents could more easily afford to pay for an emergency expense out of pocket. While just 40 percent of millennials and 42 percent of Gen Xers can handle a $1,000 emergency by tapping their savings, 60 percent of Boomers could do so.
The majority of Americans would have to turn to other options to pay for an emergency:
While more than half of people are unprepared to cover the cost of an emergency costing $1,000 or more, such occurrences are surprisingly common. Sixty percent of respondents said they had encountered an emergency that cost them $1,000 or more in the past year, and 17 percent had three or more such emergencies during the past 12 months.
Thirty-three percent of respondents say they are still in debt from borrowing money to pay for a previous $1,000-plus emergency. Of Americans with debt from a past emergency, 33 percent still owe $5,000 or more, including 18 percent whose outstanding balances are $10,000 or more.
Boomers were the most likely to have emergency debts that were five years or older, with 17 percent carrying such debt. Millennials were more likely to have such debt, with 40 percent carrying a balance from a past emergency.