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Financial Literacy - Emergency fund
National poll results
The results are mixed. Americans are saving more than last year, but some are better off than others.
Creating an emergency fund

Women trail men in saving

Do you have an emergency fund of at least three months' living expenses readily available in a savings or money market investment?

Source: Bankrate.com 2007

3-month cushion
Fewer than half of Americans (46 percent) have a three-month savings cushion, the minimum recommended by financial planners, but those numbers are higher than last year's 39 percent. The numbers resemble those from our May poll. When asked how they would cover an unexpected expense of several thousand dollars, 51 percent of respondents in that poll said they would pay from savings.

Jean Chatzky, author of several books on personal finance and host of the nationally syndicated daily radio program, "Talking Money with Jean Chatzky," saw the poll results as a positive sign. "We are constantly told that Americans are not saving anything," she says, "and yet nearly half of the people surveyed have three months of living expenses in a liquid account that they could access in an emergency. Would I like to see that number higher? Of course, but I expected it to be much lower."

Nevertheless, men are much more likely than women to have three months of living expenses in emergency savings (55 percent versus 39 percent). Lower income Americans are least-prepared for emergencies, with only a quarter of those earning less than $30,000 annually holding the recommended three-month cushion. This means that based on savings figures alone, three-quarters of low-income Americans are living in precarious financial situations.

-- Posted: July 23, 2007
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