Survey Finds Average Unexpected Expense Exceeds $1,400
broken piggy bank and hammer

Survey Finds Average Unexpected Expense Exceeds $1,400

Each year, the Federal Reserve releases a report titled Economic Well-Being of U.S. Households. One of the data points the Fed looks at as part of this study is the percentage of Americans who could afford to cover a $400 unexpected expense. However, while the 68% of adults that reported being able to cover such an expense marked a record high, a new survey from Lending Club and PYMNTS shows that the average cost of an unexpected expense is far higher than that $400 number.

According to the new survey of more than 4,000 U.S. consumers, 46% of respondents reported facing at least one unexpected expense within the prior 90 days — including 24.4% who had multiple emergency expenses during that timeframe. Of those, 56% totaled more than $400. In reality, the average of these expenses came to $1,447.

These findings were accompanied by the fact that 59% of U.S. consumers describe themselves as living paycheck-to-paycheck. Although that’s down slightly from the 61% who reported being in such a situation last month, it is still five points higher than a year ago. Understandably, the income bracket with the largest share of consumers living paycheck-to-paycheck was those making under $50,000 a year. Of those in that group, 74% reported scraping by — however, this was down from 76% in July 2021. Meanwhile, the percentage of those making over $100,000 a year who were still living paycheck-to-paycheck rose from 34% last July to 43% in the latest survey.

Commenting on the latest report, Lending Club’s Financial Health Officer Anuj Nayar stated, “The need to update the $400 emergency expense benchmark is evident in this report. Inflation in the last year, let alone the last decade, has made it much more difficult for consumers to save while staying on top of their expenses.”

continued, “Not only are consumers saving less every month, but they are likely to encounter an emergency expense, if not multiple, putting them at a greater risk for increased financial hardship. This fact paves a financially difficult road ahead for consumers.” 

This survey once again shows that many Americans — regardless of their income level — continue to struggle with their finances. What’s more, with inflation being a top story over the past year, it’s no surprise that the paycheck-to-paycheck problem plaguing many consumers has only gotten worse. As for the $400 figure that Lending Club takes aim at in this release, while it’s true that the figure may be low in many cases, the Fed doesn’t claim that this is really the average but, instead, uses it as a benchmark. The bottom line is that, although it may be difficult to build one, emergency funds continue to be a game-changing tool for consumers, making them a top financial goal for those looking to break the paycheck-to-paycheck cycle they find themselves in.

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Brim logo

Brim Financial Raises $85 Million as It Eyes Global Expansion

Toronto-based FinTech infrastructure startup Brim Financial has announced a new funding round. About the round: Brim has revealed an $85 million round. The Series C was led by EDC Investments while new investor Vistara Growth and returning investors White Owl Group, Epic Ventures, and Zions Bank also participated. To date, the company has now raised $110 million including a Series B in 2021. According to Brim, the latest funding will...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories:, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...
Rent Day

Bilt Announces Home Collection Deal for May 2024 Rent Day

For May's Rent Day, Bilt is offering a deal that will allow members to decrease their rent bill while also adding to their home decor. About the Home Collection offer: Bilt has crafted a unique Rent Day offer for May 2024. Through the 1st, when Bilt members redeem their points toward rent payments, they'll receive the same number of points to be used toward Bilt Home Collection items. To take...