Financial security: It’s a concept foreign to millions of Americans. The thought that you have enough money to pay your rent, phone bill, and put food on the table is a pipe dream for a lot of people. Although you might have a job and enough cash flow to make ends meet, feeling true financial security is a long way off in most households. But that doesn’t mean it’s impossible to achieve.
The average American is working on thin margins. If you take a peek in the typical American bank account, you’re going to find some working capital — around $4,400. Although some people might rejoice at the thought of having a comma in their account, that $4,400 isn’t really enough to provide peace of mind. Consider that there are rent or mortgage payments always creeping up, debt payments on credit cards or student loans, and the fact you need to pay for transportation and meals.
Suddenly, that financial cushion is looking pretty thin. And if you were to miss just one paycheck, things could get hairy. So how much financial padding would it take to provide a real security blanket? New data from money management service Banktivity provide us with some answers.
After surveying more than 2,000 people, Banktivity’s team concluded the average American isn’t secure when it comes to finances. In fact, 80% of the respondents said they felt “far from secure.” On top of that, 33% said they’d “completely run out of money in less than a week” if they lost their jobs.
But let’s focus on the concept of security before diving deeper into the data. What, exactly, do we mean?