Suze Orman Explains Why Most Americans Can’t Afford a $500 Emergency Expense
Written by
Gabrielle Olya
Edited by
Gary Dudak
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We’re often told to “expect the unexpected,” but when it comes to our finances, many Americans aren’t following this advice. A recent study conducted by emergency savings startup SecureSave found that six out of 10 employees would be unable to cover a $500 emergency expense, such as a hospital bill or car repair.
While some people would blame inflation or a lack of income for this stat, Suze Orman, who is a co-founder of SecureSave, believes that there is something else at play here.
Why Are So Many Americans Unable To Afford a $500 Emergency Expense?
Orman believes that the reason so many Americans can’t afford to cover an emergency comes down to their choices and attitudes about money.
“They don’t save money,” she told GOBankingRates. “They have all these things that are in front of them — going out to eat with their friends, going on vacation, taking their kids here and there. I just was reading an email from somebody who’s $100,000 in debt, but yet she’s still going to take a road trip with her daughter because her daughter’s friend’s parents took their kids on a road trip. There’s all this pressure now for people to spend money.”
In addition to pressure from society, Orman notes that the temptations to spend have never been harder to resist.
“The internet and advertisers and artificial intelligence and TikTok and everything else has gotten so good at enticing people to spend money on things that they don’t even need or want, and they do it — they can’t resist it,” Orman said. “The advertising methods are more intelligent at getting them to say ‘yes’ than they are at getting themselves to say ‘no.’ It’s really just that simple.”
How To Build Savings — Despite Spending Temptations
Because it’s so easy to spend, it’s best to move cash into an emergency savings fund before you even have the opportunity to spend it.
“It has to be automated,” Orman said. “As soon as it’s automated through a program like SecureSave, they then realize, ‘Oh, I didn’t miss that [money]. I’m going to raise my $25 a month contribution to $37.'”
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