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Question EF3. Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense? Respon

Question EF3. Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense? Response Percent Put it on my credit card and pay it off in full at the next statement 37 Put it on my credit card and pay it off over time 16 With the money currently in my checking/savings account or with cash 45 Using money from a bank loan or line of credit 3 By borrowing from a friend or family member 10 Using a payday loan, deposit advance, or overdraft 2 By selling something 7 I wouldn't be able to pay for the expense right now 13 Note: Number of unweighted respondents 11,400 from https://www.federalreserve.gov/publications/files/2023-supplement-economic-well-being-us-households-202405.pdf https://www.federalreserve.gov/publications/files/2023-suppl...

n4r9 2y ago
Hard to interpret this. It either shows that 55% do not have enough money to pay the expense, or that 82% may well have the money but 37% would prefer to pay it off after their next paycheck anyway.
- xvector 2y ago
  No, it's 35%. Credit card usage is fine if you can pay off the card.
  - n4r9 2y ago
    What about the 45% who would just pay it off with cash/savings?
  - oblio 2y ago
    The ones that can pay immediately, ok. But paying it over time for $400 is pretty much a sign of hardship.
- CalRobert 2y ago
  I've seen people interpret "would use a credit card" as a sign something is wrong but for me it just means I like getting cashback. Though to me it looks pretty dire - having to sell something, borrow from family/friends, etc. for 400 bucks is pretty terrible.
j33zusjuice 2y ago
That question allowed respondents to select multiple. EF2 and EF7 give a very clear picture of the average person’s financial situation.
insane_dreamer 2y ago
This puts at 35% those for whom $400 would be a hardship (don't have the money on hand). Still a significant amount.
Clent 2y ago
Those numbers cannot be percentages, they add up to 133.

n4r9 2y ago

Hard to interpret this. It either shows that 55% do not have enough money to pay the expense, or that 82% may well have the money but 37% would prefer to pay it off after their next paycheck anyway.

xvector 2y ago
No, it's 35%. Credit card usage is fine if you can pay off the card.
- n4r9 2y ago
  What about the 45% who would just pay it off with cash/savings?
- oblio 2y ago
  The ones that can pay immediately, ok. But paying it over time for $400 is pretty much a sign of hardship.
CalRobert 2y ago
I've seen people interpret "would use a credit card" as a sign something is wrong but for me it just means I like getting cashback. Though to me it looks pretty dire - having to sell something, borrow from family/friends, etc. for 400 bucks is pretty terrible.

j33zusjuice 2y ago

That question allowed respondents to select multiple. EF2 and EF7 give a very clear picture of the average person’s financial situation.

insane_dreamer 2y ago

This puts at 35% those for whom $400 would be a hardship (don't have the money on hand). Still a significant amount.

Clent 2y ago

Those numbers cannot be percentages, they add up to 133.