If you needed to quickly find some extra money to cover an emergency expense, what would you be willing to give up?
If you answered “anything but booze,” you’re not alone.
Only 37% of Americans surveyed are willing to give up alcohol in order to save money, according to a new Bankrate survey.
That’s surprising, but the differences between older generations and millennials are where things really get interesting:
- A mere 17% of people 71 or older said they’d skip the sauce.
- Millennials are far more responsible than their elders, with 51% saying they’d give up their craft beer and cordials.
- 44% of millennials said they’d also cut back on their coffee consumption.
Even if they don’t give up booze, 69% of millennials would still rather cut back on overall spending or dip into their savings, rather than rack up credit card debt to cover an unexpected expense.
Meanwhile, only 41% of all adults surveyed say they’d use their savings in an emergency.
The survey also found three out of five Americans had a major expense in the past year. Most of the emergencies were related to illness, car trouble or home repairs.
“It’s not a matter of if, but when an unexpected expense will pop up,” National Endowment for Financial Education spokesperson Paul Golden told Bankrate. “It’s only a matter of time.”
Been There, Done That
I can attest to this.
Late last year, my family was hit with a $1,200 bill for a structural engineering survey after it was discovered our home might be sitting over a sinkhole (yes, I’m pretty freaked out).
If we need further assessments it will cost an additional several thousand dollars (even more freaked out).
My husband and I will decide at that point whether to use a credit card or some of our savings — just skipping a few morning lattes isn’t going to cover that bill. Bankrate is right: Since we’re Generation X-ers, we’ll probably go the credit card route, but we’ll cross that bridge if we come to it.
I have to say, millennials’ commitment to saving money for a rainy day without relying on credit cards is pretty impressive.
They’re regularly bagged on for living too much in the moment — but if the Bankrate survey is any indication, it’s older generations that could learn a thing or two from our kids about money management.
Convinced it’s time to build an emergency fund of your own so you don’t have to give up margaritas and macchiatos? Here’s everything you need to know to get started.
Your turn: What was your last unexpected expense? How did you pay for it?
Lisa McGreevy is a staff writer at The Penny Hoarder. She believes in saving up for emergencies but who can really predict a sinkhole?