Life Insurance Quotes

Majority of Americans are unprepared for emergency expenses

08/11/11

According to a recent study conducted by the National Foundation for Credit Counseling (NFCC), 64 percent of Americans are not prepared for unexpected expenses with an emergency fund.

"Without adequate savings, consumers have poor resolution choices when an emergency arises," said NFCC's spokesperson, Gail Cunningham. "People often say they can't afford to save, but the truth is that they can't afford not to."

Seventeen percent of the unprepared majority said that they would borrow money from family or friends to deal with unexpected expenses. NFCC states that this practice can be awkward and negatively impact relationships.

Another 17 percent of the unprepared group indicated they would disregard existing monetary obligations to pay for emergency expenses. NFCC cautions that this attitude can easily spiral out of control, and skipping out on doing things like paying rent, credit card bills or loans can have serious consequences. A further 12 percent of unprepared Americans said that they would sell or pawn assets to cover unexpected expenses.

"Selecting any option other than taking the money from savings should be a red flag," said Cunningham.

Those looking for more ways to maximize on their savings could look into the benefits of annuities. These accounts have no annual contribution limits and they grow on a tax-deferred basis.

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