Income inequality is growing.
via Flickr user (cc) Pyogenes Gruffer
America is the ninth richest country in the world with an average per-capita GDP of over $50,000. However, the income equality gap which has widened over the past 30 years means America’s top 10 percent make nearly nine times the annual income of the bottom 90 percent. So it shouldn’t comes as a shock that a new study from Bankrate found that 41 percent of Americans don’t have enough savings to cover a $500 unplanned expense.
When facing an unplanned expense, 20 percent of respondents with inadequate savings said they could pay for it on a credit card and 11 percent said would turn to a family member or friend for assistance. 20 percent would cut back their spending by reducing the amount they shell out on restaurants or alcohol.
Although the study shows that a large swath of Americans are on insecure financial footing, the figures do have a silver lining. Last year, only 37 percent of Americans had enough in their savings to cover a $500 unexpected expense. The study also showed that Millennials were the generation best equipped with a $500 financial emergency. 47 percent of 18 to 29 year olds said they could dip into their savings to cover the expense.