Millions of Americans aren’t ready for the next recession or economic slowdown.
This vulnerability became apparent when millions of federal workers were forced to go without a paycheck back in January.
The Underlying Crisis
More than three quarters of Americans live paycheck to paycheck. That means many families aren’t able to cover all of their monthly expenses if someone in their household stops getting paid.
Not having a financial buffer can spell disaster when a recession hits or an unexpected emergency strikes.
Savings? What Savings?
Beyond just living paycheck to paycheck, the problem goes much deeper.
Only 1 in 5 Americans has more than $10,000 in an emergency fund to cover a major emergency.
More staggering is that three in five Americans have less than $1,000 on hand to take care of an unexpected incident. That means many are not ready for another recession.
When families aren’t able to afford to pay their bills or need help with making big purchases, such as getting a new car when their old one breaks down, they turn to loans.
But the strength of the economy has made even getting a loan much trickier.
In the years after the last recession, interest rates stayed surprisingly low.
The cost of carrying any debt is going up, which means those who have struggled to make ends meet to begin with are forced to borrow money at higher interest rates.
Some economists warn that another recession may be close even though low unemployment rates have implied economic strength in recent months. If so, it could mean big trouble for families already struggling to stay protected.
What do you think? Are we ready for another recession?