Connecting some research “dots” suggests that may be the case.
A recent Bankrate.com survey says that 40% of respondents or their immediate family ran into a major unexpected expense last year.
That’s a problem since most Americans (63%) don’t have enough budget-cushion or savings to cover an unexpected $1,000 expense (think, medical bill, house or car repair).
According to the poll, only 37% said they would be able to take the money directly from savings; the rest said they would try to cut expenses (24%), use their credit cards (15%) or borrow money from friends & family (15%). About 1 in 10 had no idea what they’d do.
Predictably, those with higher incomes were most likely to say they would be able to tap savings for emergencies or divert some discretionary spending.
75% of people in households making less than $50,000 a year and 2/3s of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.
Even for the wealthiest 20% — households making more than $100,000 a year — more than 1 in 3 say they would have some difficulty coming up with $1,000. Source
Obviously, the threat of a large, unexpected expense is emotionally daunting to most Americans.
“It definitely adds stress to everyday life. It hangs over you.”
To make matters worse, there is some evidence that the financial stress may impair “cognitive functioning” – that is, dent a person’s IQ.