Stop Being Financially Fragile

In May of this year, the National Bureau of Economic Research, Annamaria Lusardi of the George Washington School of Business, Daniel J. Schneider of Princeton University and Peter Tufano of Harvard Business School published a paper entitled, “Financially Fragile Households: Evidence and Implications.” Their study used the 2009 TNS Global Economic Crisis survey to document the financial situation in the US and neighboring countries.

The survey had a simple question:“If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?” Results of the survey indicated that in the US, 24.9% of households said that they would certainly be able to come up with the funds, 25.1% reported “probably able,” 22.2% said probably unable, and 27.9% reported certainly unable. All in all the findings suggested that half of US households are “financially fragile.”

This kind of information certainly doesn’t help, especially since the country is in the middle of the economic crisis. If you feel that you’re part of the “can’t cope” group of the survey, don’t automatically put yourself under the “financially fragile” category. Instead, assess your situation, and realize that in spite of debt and other financial worries, you still have several options. Short-term loans such as cash advances and payday loans can help you cope with an unexpected charge of say, two grand. Just make sure to read the fine print, and discuss all the details with your lender.

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