Insights Brief: The Financial Fragility of American Families
The economic crisis that began in 2007 started a wide-ranging spiral that not only weakened the U.S. economy, but also eroded the financial stability of households. This brief explores how American families are positioned to confront economic shocks and the resources they may—or may not—have available to help them to weather economic crises. The results expose the fragility of American families and the tenuous financial position of an alarming percentage of U.S. households.
To measure a family’s “financial fragility” in the face of economic shocks, researchers developed a set of questions around a family’s capacity to access emergency funds. The answers to these questions indicated that the capacity of Americans to cope with economic shocks was very low. For example, half of the respondents reported that they probably or certainly could not come up with $2,000 in 30 days to handle an unexpected expense such as a major car or home repair.
Read FINRA’s The Financial Fragility of American Families to learn how economic and demographic factors play a role in this limited capacity to respond to emergencies and what resources Americans are most likely to tap when dealing with an economic shock.