Save up

Fort SmithOutside The Wire

by The City Wire staff ([email protected]) September 3, 2009 2:58 pm 54 views 

A HSBC Bank USA survey suggests 38% of Americans could not live off their savings for a month.

The survey discovered that if respondents or the primary breadwinner in their home lost their job, the majority of Americans (61%) could only live on their savings for three months or less, with 38% saying they do not even have enough funds to sustain their expenses for one month.

Experts often recommend having an emergency fund that could last three to six months, but the new survey finds that only 39% of respondents are prepared for this. Updated guidance suggests Americans have savings on hand to last at least 12 months; by these standards, only 11% of Americans are adequately prepared.

“While we have seen a robust increase in the personal savings rate in 2009, and we are moving in the right direction, what is clear is that it’s not enough,” David Goeden, executive vice president, Personal Financial Services, HSBC Bank USA, said in a statement. “More than ever, Americans are aware of the importance of having an emergency fund; yet, despite this heightened awareness – and rising unemployment rates – there is still a sweeping lack of preparedness for the unexpected.”

OTHER SURVEY FINDINGS
• Fifty-one percent of respondents with a household income (HHI) of less than $50,000 could only live on savings for less than one month.

• Despite having a higher HHI, 29% of respondents with a HHI of more than $100,000 could only live on their savings for up to three months. Those who are prepared for less than one month include families with children (44%) and adults age 55 and older (31%).

• When asked what they would do if they unexpectedly received $1,000, 63% said they would pay bills, and nearly 40% said they would put all or the majority into savings.

• Over the past six months 55% of survey respondents have cut back on leisure activities, 46% have cut back on travel, and 40% have cut back on electronics.

• Of those who have reduced spending, 93% will return to spending in at least one of the areas in which they have cut back once the economy improves.