Encore: Why so many households find it difficult to cover a $400 emergency expense

Despite a strong economic recovery, about 40 percent of households in 2017 still said they would have trouble paying for a $400 unexpected expense. A recent study from the Center for Retirement Research uses data from two Federal Reserve surveys — the “Survey of Household Economics and Decisionmaking” (SHED) and the “Survey of Consumer Finances” (SCF) — to understand why so many households say they are unable to come up with $400.

Every year since 2013, the SHED asks over 12,000 households about subjective and objective measures of their financial well-being. The specific question regarding precautionary saving is: “Suppose that you have an emergency expense that costs $400.

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