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personal finance

Half of Americans Could Last Just One Month without Income


July 21, 2009

With unemployment continuing to rise in the midst of the recession, Americans do not have much of a financial cushion should they suddenly lose their income. According to a new survey by COUNTRY Financial, nearly half (49 percent) say they wouldn’t be able to pay their bills on time if they went more than one month between jobs.

While they might not be able to sustain their financial well-being for very long, Americans are feeling slightly more confident about their job security. Twenty-seven percent say it is very or somewhat likely they could lose their job in the next 90 days, compared to 29 percent who said this in April.


Priorities in the right place

July 21, 2009

Half of employed American adults say they would tap their savings to cope with a shortfall in income if they lost their job rather than relying on retirement accounts (16 percent) or short term vehicles like credit cards (7 percent) and bank loans (8 percent).

“While no one wants to have to dip into their savings, it’s encouraging that many Americans realize savings is a better place to tap to get by than their retirement account or credit cards,” says Keith Brannan, vice president of Financial Security Planning for COUNTRY Financial. “With some economists predicting the U.S. unemployment rate could rise to 10 percent, it is more important than ever to have a cushion against lost income. It’s important for all of us to review and adjust our financial plans to build a level of emergency savings sufficient to carry us for several months.”


Spouses’ income helps some get by

July 21, 2009

Of those who are married, nearly half (47 percent) say they would be able to get by on just their spouse’s income if they lost their job. Men (39 percent) are less likely to feel secure in relying on their spouse’s income than women (57 percent).

“When developing your financial plan and budget, try to cut your expenses so all of your monthly bills could be covered by one spouses’ salary,” adds Brannan. “Doing so will help you become more confident in your ability to maintain your financial security should something unexpected occur and free up income to build emergency or long term savings when times are good.”


Maintaining financial security under threat of a job loss

July 21, 2009

Brannan recommends these tips for people looking to protect themselves in a time of high unemployment:

  • Live frugally, no matter your employment situation. Most advisors recommend stashing away three to six months of income in an emergency fund.
  • If you are in a job you think might be downsized, polish up your job skills. Take a course at a community college or consider an industry designation to make yourself more marketable and keep your resume up to date.
  • If you have lost your job, the best advice is to do everything possible to limit expenses. Eat at home, grow a garden, shop with coupons, and take advantage of inexpensive entertainment, like a free concert in the park or attending a AA baseball game instead of a major league game.
  • If you are in between jobs, consider ways to boost income, like getting a part-time job. Even a lower-level or temporary job can help cover expenses while you look for permanent work. Having a garage sale or selling old items on the Internet can also put more money into your wallet.

The July COUNTRY College Funding survey is based on a national telephone survey of more than 1,241 Americans who expect to be responsible for paying for a child’s education and is compiled by Rasmussen Reports, LLC, an independent research firm. The margin of sampling error for this survey is approximately +/- 3 percentage points with a 95 percent level of confidence.

About COUNTRY Financial

COUNTRY Financial serves about one million households and businesses throughout the United States. It offers a full range of financial products and services from auto, home and life insurance to retirement planning services, investment management and annuities.