Most families aren’t prepared for emergencies
MINNEAPOLIS, June 11 (UPI) -- A serious or disabling injury, the birth of a child or the care of an elderly family member are among the many major life events for which a majority of people are financially unprepared, a new survey indicates.
A study for the Lutheran Brotherhood shows 55 percent of people in the United States have not developed a financial strategy for dealing with sudden changes in life.
In fact, only 42 percent of people are prepared for life changing events, although the percentage of people who are prepared goes up with their income.
Sixty-two percent of those with incomes of more than $75,000 per year indicated they were ready for an emergency, compared to 33 percent who were not.
Those people in their prime working years also were more likely to say they could handle a sudden life change. Half of those between 35 and 64 say they are prepared, compared to only 33 percent for those over 65 and under 34.
“When families prepare for life-changing events, they can make conscientious choices about their lives and their money, instead of being controlled by their finances,” Lutheran Brotherhood LifeMap planning analyst Kevin Larson said. “A planned approach helps families align their finances with their values.” Among the kinds of incidents that can cause a life change? Personal injuries or disabilities were experienced by 10 percent of those surveyed, while 9 percent had to pay for a child's college education.
Another 9 percent were financially hurt by divorce, while 5 percent had additional unexpected expenses due to the birth or adoption of a child.
Having to pay for the assisted living or in-home care of an elderly relative impacted 4 percent of those surveyed, while wedding expenses hurt 3 percent.
Copyright 2000 by United Press International. All rights reserved.