Could you pay an unexpected $400 expense?
More than four in 10 Americans said they couldn’t without borrowing money or selling something, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households released Tuesday.
That’s actually an improvement over 2013, when half of Americans said they could not afford a $400 expense.
The report found that more than one in five adults can’t pay off all their monthly bills. And one in four skipped necessary medial care because they could not afford it.
"The finding that four-in-10 adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling," Bankrate.com’s chief financial analyst, Greg McBride, said in a statement. "Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs."
McBride also pointed out that fewer than 40 percent of adults think their retirement savings are on track.
"The burden is on us as individuals to save for our retirement," he said.
Other findings from the Federal Reserve’s report:
• Almost three-quarters of adults said they were either "doing okay or living comfortably in 2017." That’s 10 percentage points more than in 2013.
• More educated adults reported greater well-being, though adults of all education levels have shared in the improvement over the past five years.
• More than three-fourths of whites were at least doing okay financially in 2017 versus less than two-thirds of blacks and Hispanics.
• Three in five urban residents "describe the economy in their local community as good or excellent versus two in five rural residents who offer this positive of an assessment of local conditions."
• About 30 percent of adults participated in the gig economy in 2017. That’s up slightly from 2016 "due to an increase in gig activities that are not computer or internet-based, such as child care or house cleaning."
"Gig work is typically a modest share of family income," the report found. "For over three-fourths of gig workers, these activities account for 10 percent or less of their family income."
The report was compiled from a survey of more than 12,000 people across the country.
Read the whole report here.