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Emergencies can lead to overwhelming debt for Florida residents

If you were suddenly sick, how would you pay for the medical bills? What about if you were laid off? Would you have enough money in savings until you found a new job?

These are just some of the things Florida residents should be thinking about when it comes to having an emergency savings fund. The hope is that the emergency will never arise, but if it did, the money would be there to pay for the associated expenses without having to go into debt.

According to Bankrate.com, having an emergency savings fund is not necessarily a top priority — or even feasible — for many Americans. In fact, of the 1,004 people surveyed over the phone, only 55 percent had more in emergency savings than credit card debt.

The survey also found other interesting findings when it comes to credit card debt versus emergency funds, including:

  • Of parents with juvenile children, 29 percent of those parents had more credit card debt than savings.
  • Of those without children younger than 18, 21 percent had more credit card debt than savings.
  • There are gender differences: 60 percent of men and 49 percent of women have more saved than in credit card debt.

In looking at the issue, one cannot blame the recession, as the personal savings rate was on a decline for the 20 years prior to the 2007 recession. One would assume this may have something to do with attitudes regarding the importance of having savings.

Many are also unable to save, meaning they make enough to cover their current expenses, but do not have any extra leftover.

In any situation where there is no savings to cover an unexpected emergency, this can result in debt. In turn, this debt can quickly grow to out-of-control proportions. However, before debt gets to the point of foreclosure of garnishments, speak with a Florida attorney who has experience handling debt relief cases.

Source: ABC News, “Nearly Half of Americans Have More Credit Card Debt Than Savings,” Susanna Kim, Feb. 25, 2013

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