About half of Americans believe they do not have enough money on hand to “make a major purchase, such as a car, appliance or furniture, or pay for a significant home repair” if they needed to, according to new research.
Gallup discloses this finding in a Gallup Daily tracking survey conducted throughout 2015. Based on responses from more than 44,500 Americans, the survey randomly polled adults, ages 18 and older, living in all 50 U.S. states and the District of Columbia.
The report shows that high-income Americans are more likely than their lower-income counterparts to say they could handle such a financial situation, as would be expected. But 16 percent of those whose annual household income is $240,000 a year or more say they, too, wouldn’t be able to make a major purchase or handle a major repair.
In 2015, 51 percent of Americans said they would have enough money for a major purchase or repair, while 48 percent said they would not. These perceptions have not changed significantly in recent years. In 2011, the first full year in which Gallup asked the question, 50 percent said they would be able to handle a financial emergency.
Less than half of those with a household income below $48,000 a year say they would have enough money for an emergency. That percentage rises to three-quarters among those with an income of $90,000 to less than $120,000 a year, well above the national median income. The percentage tops out at 84 percent among those in the highest income category included in the analysis — those earning $240,000 or more.
7 in 10 have enough
The fact that half of Americans say they would not be able to make a major purchase does not mean that half don’t have enough money to make ends meet on a day-to-day basis. Responses to a separate question, asked of a different subgroup of respondents, show that 70 percent of Americans say they have enough money “to buy the things they need.”
Only those in the two lowest income groups — those whose household income is less than $24,000 a year — are below the 50 percent mark in saying they have enough money to buy what they need. The percentage rises to above 50 percent among those making $24,000 or more a year, and generally continues to climb across each increasing income group.
Cutting back on spending
Although 70 percent of Americans have enough money to buy what they need on a daily basis, three in five Americans report they are cutting back on how much money they spend each week, including over a third of those in the highest income categories. This finding suggests that:
people may tend to think they are spending too much even if they can afford it;
they want to save more of their discretionary income or;
Americans’ responses to these money and spending questions underscore the complex way in which Americans — even those with high incomes — view their personal financial situations. On one hand, the significant majority of Americans say they have enough money to do what they need to do on a daily basis, even while almost as many say they are attempting to cut back on their spending. And regardless of Americans’ ability to make ends meet, half say that they would struggle with the need to make a major purchase or finance a major repair.
Americans’ incomes are clearly related to the way they view their finances. A majority of those making $24,000 or more appear to be able to make it financially on a day-to-day basis in the U.S. today, though they are far from the $48,000-a-year income threshold for being able to cope with a sudden financial need.
But those with very high incomes are not immune from financial worries. Over a third of those making $240,000 or more say they are cutting back on their spending, with a sixth of this group saying they wouldn’t be able to make a major purchase or pay for a major repair.
Previous Gallup-Healthways well-being research shows that a significant percentage of high-income Americans are struggling or suffering in financial well-being, supporting the idea that high income alone does not necessarily shield one from money concerns.