80% of Americans Aren't Confident They Could Miss 3 Paychecks

Having an emergency fund is important to cover you in case of missed paychecks -- but many Americans don't have one. 

What would happen if you got sick and couldn't work temporarily, or if you lost your job and couldn't find another one right away?

If you're like most Americans, this could lead to serious financial disaster -- including missed bills, damaged credit, or even life-changing consequences such as foreclosure of your home, eviction, or repossession of your vehicle. 

Why are Americans at such great risk if they miss out on a little bit of income? Unfortunately, it's because the majority of Americans don't have nearly enough money saved, as new research by The Ascent into financial planning reveals. 

Most Americans are lacking appropriate emergency savings

Financial experts recommend that you have an emergency fund with enough money in it to cover three to six months of living expenses. This emergency fund should be accessible in a high-yield savings account or other account that makes it easy to take out the money if you need it.

Having this emergency fund is important to cover unexpected costs without reaching for the credit cards -- and also to protect you in case you have to go without income for a period of time. That way you won't have to forgo paying bills or end up deeply indebted as you borrow to cover basic costs of living. 

Unfortunately, The Ascent's recent research revealed that most Americans aren't prepared to cover costs in the event of an income interruption. In fact:

• 7% of Americans could miss no paychecks before failing to meet their financial obligations
• 11% of Americans could miss only one paycheck before they wouldn't be able to fulfill all their financial commitments
• 9% could miss just two paychecks
• 3% could miss three paychecks and 49% are not sure

Altogether, this means 30% of Americans could be in serious financial trouble as soon as they went without getting paid for three checks -- even more if we include those who are not sure. Depending on whether you're paid weekly, every other week, or monthly, this means that within three months or less, close to a third of Americans would be in serious financial trouble if their income stopped. 

Obviously, these Americans who couldn't miss a few checks are lacking the requisite emergency savings needed to see them through. 

What to do if you're not prepared for an income interruption

If you're one of the millions of Americans who'd start missing financial obligations after missing a paycheck -- or two or three -- it's best to take action before a job loss, illness, or other unexpected event occurs. 

You should start working on aggressively saving for emergencies until you have the emergency fund necessary to provide financial stability if things go wrong. It can seem daunting to save three to six months of expenses, so break this down into smaller, more achievable goals. Figure out how much you'd need to save each month to meet your emergency fund goal within six months or a year. Then, look for ways to cut your budget to hit your target.

You may even want to consider a side gig to help you boost your emergency savings -- especially if there's reason to suspect you may miss paychecks, such as an unstable job, ill health, or pressing family obligations on the horizon. You can use the money from your side gig to shore up your emergency fund more quickly. And as a bonus if you lose your job, your side gig could help keep you stay afloat until you find a new one. 

Don't leave yourself unprepared for a loss of income

Income interruptions can happen for a whole host of reasons, from a layoff or termination to a company restructuring to a family problem or health issue. It's imperative you're prepared because you don't want your financial life to be sent into turmoil. Get serious today about building up an emergency fund in case you need to miss more than three paychecks. You'll soon have the peace of mind of knowing that you won't quickly descend into financial disaster if something goes wrong.