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Survey 64 dont have funds for unplanned expenses
WASHINGTON (8/11/11)--About 64% of Americans would use a source other than their savings account to satisfy a $1,000 unplanned expense, the National Foundation for Credit Counseling’s (NFCC) July online poll revealed. This could be an opportunity for credit unions to help members bolster their savings for emergencies. The largest number of those surveyed--nearly 2,700 respondents or 36%--said they would tap their savings account to fund an unplanned expense. Using rainy day funds for an emergency is exactly why a person saves, to protect them against the unknown, said NFCC. However, the remaining 64% are in a much different situation, living on a slippery financial slope, NFCC said. “Without adequate savings, consumers have poor resolution choices when an emergency arises,” said Gail Cunningham, NFCC spokesperson. “People often say they can’t afford to save, but the truth is that they can’t afford not to.” To resolve the problem, 17% of respondents surveyed indicated they would borrow the money from friends or family. Another 17% said they would neglect existing obligations to satisfy the emergency need. This option can easily get out of control and have serious consequences, NFCC said. Twelve percent of those surveyed would sell or pawn assets. Disposing of unwanted or unused items can be a positive way to raise funds, but not out of desperation, NFCC said. Taking out a loan or obtaining a cash advance from a credit card were each selected by 9%. The low number of individuals choosing these categories could indicate a lack of access to credit. “Selecting any option other than taking the money from savings should be a red flag,” Cunningham said. “If saving money has always seemed out of reach, there is no better time than now to get to the root of the problem and protect yourself, your family and your financial future.” Those needing help finding hidden money in their budget can reach out to a trained NFCC Certified Credit Counselor. Call 800-388-2227, or use the link. For help in Spanish, call 800-682-9832. The NFCC’s July Financial Literacy Opinion Index was conducted via the homepage of the NFCC website from July 1 to July 31 and was answered by 2,667 individuals.
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