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Most Americans couldn't cover $1,000 emergency

Friday - 8/12/2011, 7:51am  ET

emergency room (AP)
An emergency room visit is one of the things for which people are unprepared. (AP)

Andrew Mollenbeck, wtop.com

WASHINGTON - A new survey says a moderate emergency - a failed transmission or a medical emergency during a pick-up game, for example - would be too expensive for many Americans.

The online survey from the National Foundation for Credit Counseling finds 64 percent of respondents did not have the cash available to cover a $1,000 emergency. The organization says 2,700 people answered the poll.

"Now, admittedly, $1,000 is a lot of money, but in this day and time it's become the price point for many things," says Gail Cunningham, a spokesperson for the Washington-based nonprofit.

An emergency room visit or a vehicle repair can easily surpass the $1,000 mark.

"Consumers can find themselves in need of an immediate $1,000, and we discovered that they were ill-prepared to meet that need," she says.

Cunningham says this leads to some people becoming "serial borrowers" and leaning on family members to cover unexpected bills.

She recommends, if possible, putting 10 percent of each paycheck into savings.

"That way at the end of the year you have a little more than one month's income tucked away."

Those without some established savings "are only one flat tire from financial distress," she says.

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(Copyright 2011 by WTOP. All rights reserved.)