New Report Finds a Growing Number of Americans Could not Cover a $400 Emergency Expense

The Federal Reserve recently released its “Economic Well-Being of U.S. Households in 2022” Report.

The report found that self-reported financial well-being fell sharply and was among the lowest observed since 2016. The share of adults who said they were worse off financially than a year earlier rose to 35 percent, the highest level since the question was first asked in 2014.

Additionally, the share of adults who said they would be able to cover a $400 emergency expense using cash or an equivalent declined 5 percent since last year.

Among those adults who could not pay, most said they would pay some other way, but a startling number said they would not be able to pay at all: Thirteen percent of all adults said they would be unable to pay the expense by any means.

For the growing number of adults who could not cover emergency expenses, short-term, small-dollar loans offer a lifeline. These emergency loans are accessible to people who do not generally have access to traditional credit options, and they assist people who need to pay bills or purchase necessities for their families.

Short-term, small-dollar emergency loans fill a gap left by the traditional credit industry. The recent Fed report illustrates the importance of easily accessible credit for a growing number of Americans.

Read the full report here.