Even though some households may have the money in savings, it is often already earmarked for another bill. (Photo: Shutterstock)
They say it's a strong economy. They remind us that the unemployment rate is the lowest it's been in decades. So why do so many households say they'd be up the creek if hit with a surprise bill of just $400?
According to a brief from the Center for Retirement Research at Boston College, debt could be the reason. In fact, 41 percent of households say that if confronted by an unexpected expense of $400, they'd have a tough time covering it—despite the fact that some of them may actually have that much set aside in checking or savings accounts.
That money is likely already earmarked to pay another bill, says the report, and it doesn't matter whether the household is middle income or higher income. Researchers checked that aspect of the problem and found that 17 percent of households with more than $100,000 in income said they'd have problems covering that $400 bill.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
