November 14, 2014
Two out of five Americans are living on the edge of financial disaster, a study says.
More than 40 percent of Americans live paycheck to paycheck, according to a report in the Fiscal Times, which cites a study from consumer finance company Springleaf Financial, based in Evansville, Illinois.
The study found that 24 percent of consumers have less than $250 in the bank accounts and no reserves to handle unexpected costs.
The paucity of savings can be found at all income levels. Among people who make more than $200,000 a year, one in five say they rarely save.
“With rising costs and unexpected expenses, consumers may have a tough time making ends meet,” Dave Hogan, executive vice president of marketing and analytics at Springleaf, said in a statement cited by the Fiscal Times, an online publication owned by Peter G. Peterson, the former Secretary of Commerce and chairman of Lehman Brothers.
The Springleaf study said Americans’ lack of savings is partly due to poor financial skills, with 20 percent of respondents saying they would rather go to the dentist than spend half an hour learning money management.
Younger generations also aren’t saving money, according to CNNMoney, which cites a report from Moody’s Analytics that studied the financial habits of people younger than 35.
The study found that the savings rate of Millenials fell to a negative 2 percent, which means they are spending more money than they have.
Younger generations are struggling with hefty student debt, stagnant wage growth and limited job prospects.