Many Americans Lack Rainy Day Fund

A news release from the EARN Research Institute said 54% of respondents in their latest survey said they couldn’t meet basic financial needs if they lost their income for 90 days or more. Sixty-four percent of low-income families (annual household income of $35,000) gave the same response. The nationwide poll commissioned by EARN revealed that the number of households with enough savings to last more than 90 days has dropped from 61% in June 2010 to 46% in the latest poll.

Asked where they might obtain the funds necessary to meet basic household financial needs in the event of circumstances such as job loss or catastrophic illness, 65% of those polled reported they would dip into their savings accounts. Forty-three percent of those polled suggested they would make early withdrawals from 401(k) or other retirement accounts, while 35% of the youngest adults of those surveyed (aged 18-34) suggested they would rely on credit cards.

“As the recession continues unabated, it has become bracingly clear that America’s families do not have the means necessary to weather long-term financial adversity,” said EARN President and CEO Ben Mangan, in the news release.

The poll found 66% of participants feel that employment opportunities will improve somewhat or very much over the next year, with 38% expecting an uptick to occur over just the next few months.

America’s low-income families and minorities were equally optimistic, with 65% of those polled with household yearly incomes of less than $35,000 believing a jobs recovery will occur over the next year (with 44% feeling it will happen in the next few months).

The telephone survey was conducted among 1,006 adults comprising 501 men and 505 women, 18 years of age and older, living in private households in the continental United States. Interviewing was completed during the period November 18-21, 2010.