Are you just one job loss, one paycut, and one illness away from catastrophe? Sometimes it seems no matter how much money someone may be able to save or skills they cultivate, it’s a little too easy to fall down the economic ladder. More than 20% of Americans are “economically insecure,” according to the Economic Security Index created by a professor at Yale. The three major criteria for economic insecurity are (1) major income loss (over 25%), (2) out-of-pocket medical expenses, and (3) lack of savings.
Economic insecurity is at a high point, growing from around 17% in 2000 to over 20% in 2008, 2009, and 2010 (source: Economic Security Index).
Unfortunately, twenty- and thirty-somethings are doing the worst compared with all other age groups. The article goes on to say,
Young adults, age 18 to 34, proved to be the most insecure group during the recession, with a rate of nearly 25%. The next most vulnerable folks were those age 45 to 64, with a rate of just under 20%.
How do I guard against financial insecurity? Well, I try to perform well at work, improve my skills, network, network, network, and remain geographically flexible for new opportunities. I maintain a healthcare policy, or at the very least catastrophic health insurance. And I save, save, save, for an emergency fund.
Even though I am not economically insecure right now, I’ve been through a layoff and I get what it feels like to lose most of my income and have to regroup and reinvent myself. I am glad I am in a better place now – making a decent income, healthy, planning for the future with a good dose of optimism.
But those numbers are still disheartening.
Are you financially insecure right now? How are you shoring up your financial security?









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