Americans run out of emergency funds, Edward Jones study shows

While they say they are striving for financial prosperity, too many Americans don’t have enough money for a rainy day.

According to a recently published study by Edward Jones and Morning Consult, more than nine in ten Americans (93%) believe that financial well-being is essential. But nearly half (43%) say they don’t feel financially stable, and almost a third of respondents (29%) have less than $500 in their emergency savings fund.

When it comes to defining the term “financial well-being,” the report found that the majority of Americans believe they don’t worry about monthly bills (61%), have enough money to take care of their family (57%), and are out of debt (55). %). ).

Unfortunately, survey respondents do not feel well about the level of their current emergency savings funds, with 28% reporting being stressed, 25% saying they are worried, and 25% feeling anxious. Edward Jones recommends that Americans set aside living expenses for three to six months in a reserve savings fund. However, according to the study, almost two in five (37%) of respondents expect them to last no more than a month.

“It may not be surprising that so many Americans emphasize the importance of achieving financial well-being, especially given the turbulent times we are facing, but our research shows that there are huge opportunities for people to actually achieve it,” Meaghan Doe, senior strategist at Edward Jones. , the message says.

“Whether you have the ability to take small steps or big ones, most of us can make progress in building confidence and financial security, which starts with an emergency fund,” Dow added.

Nina Lloyd, president and chief executive officer of Opus Financial Advisors, part of the Advisor Group, said the survey results are not shocking but regrettable as they show that people understand the importance of financial well-being but put it aside. .

“Like physical well-being, financial well-being takes time, commitment, discipline, and self-sacrifice,” Lloyd said. “Financial well-being can be difficult, but the rewards are well worth the effort.

“If you want to make positive changes, start small,” she suggested. “Share your realistic goals with a trusted friend or advisor who isn’t afraid to hold you accountable. Track your spending and automate critical tasks while prioritizing debt reduction and savings for the future.”

According to an Edward Jones survey, one way to improve your financial situation is to hire a financial advisor. The study found that those who work with a financial advisor are more than twice as confident in their financial well-being as those who do not (40% versus 18%, respectively).

In addition, the study found that 79% of those who use a financial advisor have a contingency fund of at least $1,000, compared to 36% of those who do not use a financial advisor.

“It is very important that people set aside a reserve fund for unexpected expenses and financial emergencies. When I meet with my clients, I usually recommend an amount equal to 3 to 6 months of expenses depending on the scenario. For households with a stable double income and unexpected large expenses, it is advisable to establish a 3-month social protection system. However, households that rely on a single source of income should target six months to guard against income loss,” said Jared P. Remesh, Welfare Advisor at SageView Advisory Group.

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