Only 40% of Americans Can Cover a Surprise $400 Expense

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • A robust savings account can make it easier to cover bills you couldn't plan for.
  • To quickly boost your savings, you could make a big temporary cut, like finding a cheaper place to live.
  • If that's not feasible, small changes to your budget can add up over time.

When it comes to unplanned bills, expect the unexpected.

There's a reason workers and retirees alike are told to keep a decent chunk of cash in a savings account. You never know when an unplanned bill might land in your lap, whether it relates to your home, your vehicle, or a medical issue. And if you don't have enough money in savings to cover that cost, you could end up stuck with costly credit card debt.

But here's something scary in that regard -- only 40% of Americans are in a position to cover a surprise $400 expense, according to a recent ResumeLab survey. And if you don't have $400 at your disposal, you may want to build up your savings.

Don't leave yourself vulnerable to debt

Sometimes, credit card debt is unavoidable. But it can lower your credit score and end up costing you a lot of money in interest.

That's why credit card debt is a good thing to avoid. But if you don't have a strong enough emergency fund, you might end up with some -- or a lot. This especially applies if you don't have enough money in savings to pay for an unexpected $400 expense.

As a general rule, you should have a minimum of three months' worth of essential expenses in your savings account. As an example, say you spend $2,500 a month on basic bills like rent, food, and car payments. In that case, you'd want at least $7,500 in the bank. And if you can't withdraw $400 from your savings comfortably, you may want to work on building your cash reserves -- before a financial emergency strikes.

How to boost your emergency savings

You have a few options when it comes to increasing your savings, though some may be harder than others. If you want to boost your savings quickly, consider making one drastic, albeit temporary, lifestyle change, like downsizing from a larger apartment to a smaller one with cheaper rent.

That might also mean having to move to a different neighborhood, but it's a cutback that could have a quick, notable impact. And remember, you don't have to live in a smaller home forever -- just long enough to boost your cash reserves nicely.

If you don't think you're up for that, or it's not possible where you live, see if you can make smaller changes. That could mean dining out less frequently, putting the brakes on store-bought coffee, or canceling streaming services. These changes may not free up as much cash for savings as a major one, like downsizing, but they can make a difference over time.

Finally, consider giving your income a boost with a side hustle. Since the money you earn from a second gig won't be earmarked for ongoing bills, you can bank all of it, minus what you owe the IRS in taxes.

The fact that many Americans can't cover a $400 expense on a whim is understandable, but it's pretty scary nonetheless. If you're in that boat, do what you can to boost your savings quickly. It'll give you not only a world of financial protection, but also peace of mind.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow