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Country Financial Security Index

Are you financially secure enough to survive an emergency like Hurricane Harvey?

Survey shows emergency funds lacking for half of Americans

Sept. 20, 2017

Natural disasters like Hurricanes Harvey and Irma remind us all how life can be upturned in unexpected ways.

It’s hard to predict the types of expenses that might arise from a weather emergency. Would you need to pay for lodging for more than just a few days or weeks? Would you need alternate transportation? What if your employer was unable to issue payroll due to the disaster?

The good news is most Americans have some cash on hand in the event of an emergency. The bad news is that most have not saved enough. 

The COUNTRY Financial® Security Index survey asked Americans to evaluate how deep their savings could go for short- and long-term expenses.

A healthy majority of those surveyed (84 percent) said they had some level of confidence in their ability to pay all debts as they come due. But not as many felt they could cover their bills for long if their financial status-quo was overturned.

The survey posed the question: How much time could you go between jobs without any income and still be able to pay all your bills on time?

Nearly half of Americans (49 percent) responded their savings would not stretch beyond three months. Of that group, 19 percent say they would be unable to cover the bills for even one month if they were to lose a paycheck.

“A key element in the personal financial security picture is an emergency fund,” said Doyle Williams, an executive vice president at COUNTRY Financial. “Financial advisers recommend having six months of salary set aside for unexpected events. If your savings reserve doesn’t stretch that far, taking some simple steps to bolster an emergency fund can put you on firmer ground.”

Emergency fund importance

Even though the recommended size of an emergency fund is often based upon salary,  job loss is only one reason to have a strong fund. Unexpected expenses of any sort can upend a monthly budget and make it harder to cover your regular bills without turning to credit.

“Unplanned expenses like car and appliance repairs, medical bills, or anything that comes up that you were not expecting to happen are all good reasons to have that emergency fund,” added Williams. “Unexpected expenses can happen to anyone, no matter how secure their income. By working with a financial professional you can better understand the big picture that includes preparedness for immediate needs, unexpected expenses, and your long-term financial goals.”

Take a full financial preparedness picture

Although an emergency fund is an important part of the personal financial security picture, it is only one part. Reviewing existing insurance coverage on a regular basis is a good way to make sure you are protected when a weather event strikes.

Homeowners might not have a full picture of coverage they have if they have not reviewed the policy for some time. Changes in the home, such as major repairs or home improvements might change the level of coverage needed.

Renters might think they have less to worry about when it comes to the effects of an emergency such as a severe storm. However, the damage doesn’t have to reach Hurricane Harvey levels to take a toll on personal items. Appliances and electronics can be damaged by power surges, for example. Renters insurance may cover property loss that renters could suffer as well as the cost of living somewhere else if a rental property is damaged. 

Homeowners should be sure to understand the distinctions between water damage covered under a homeowners policy and the damage covered by flood insurance. Flood insurance is generally only available through the National Flood Insurance Program. An insurance professional can help homeowners find out if they qualify for those programs.

More information

Tips for building up an emergency fund can be found on COUNTRYFinancial.com/simplesteps

About The COUNTRY Financial Security Index®

Since 2007, the COUNTRY Financial Security Index has measured Americans' sentiments of their personal financial security. The Index also delves deeper into individual personal finance topics to better inform Americans about the issues impacting their finances. 

The COUNTRY Financial Security Index was created by COUNTRY Financial. This survey was conducted by EMC Research, Inc., an independent research firm, commissioned by COUNTRY Financial. Surveys were conducted using a national online research panel designed to be representative of the general population and includes responses from 1,000 U.S. adults over the age of 18 for national surveys with additional interviews completed in Georgia, Illinois, Missouri and Oregon to bring the total in each of those states to 500 completed surveys.

About COUNTRY Financial®

The COUNTRY Financial® group (www.countryfinancial.com) serves about one million households and businesses throughout the United States. It offers a wide range of financial products and services from auto, home, business and life insurance to retirement planning services, investment management and annuities.

Policies issued by COUNTRY Mutual Insurance Company® and COUNTRY Casualty Insurance Company®. Issuing companies located in Bloomington, IL.