New survey finds insufficient savings for emergencies major cause of financial worry among younger women

Apr 28 2005

A new, nationwide survey released today by the Consumer Federation of America (CFA) and Visa USA finds that a lack of personal savings to cover periodic emergency expenditures was a principal cause for financial worry among women, especially younger women.

This has resulted in sleep and job productivity loss as well as deteriorating health. In direct response, CFA and Visa have teamed up to launch a "Save $500 Challenge: Preparing Women for a Rainy Day," to encourage more women to open and maintain a savings account.

Nearly three quarters (71 percent) of the women surveyed said they had worried about their personal finances in the past year and two-thirds (66 percent) cited unexpected expenses as a cause for those worries. Even more surprising, 88 percent of younger women, between the ages of 18-24, said unexpected expenses was also a contributor to their financial worries.

One of the main causes for these concerns was the fact that they had little or no money set aside for emergency situations. In fact, 42 percent of all women surveyed said they had emergency savings of less than $500. And, 55 percent of women, between the ages of 25-34, said that they did not maintain an emergency savings account of at least $500.

"The concern of younger women about their personal finances is far more widespread than we had imagined, and far greater than that of older women," said Stephen Brobeck, Executive Director, CFA. "The fact that more than one-half of younger women do not have available at least $500 in emergency savings may help explain this concern," added Brobeck.

In response to these findings, CFA and Visa have launched a "Save $500 Challenge: Preparing Women for a Rainy Day" to encourage women, especially younger ones, to build savings for unplanned emergencies. The initiative is a call to action for women to maintain a minimum of $500 but ideally $2,000 in emergency savings.

"There is clearly a need to better educate consumers, and women especially, about the importance of having a savings account for emergency financial situations," said Rhonda Bentz, vice president, Visa USA. "As part of Visa's commitment to helping consumers better manage their finances, we strongly encourage women to sign up for this Savings Challenge," she added. Women can enroll in the challenge by visiting http://www.save500challenge.org/. All participants will receive a weekly email finance savings tip and will be eligible to enroll as an American Saver, an America Saves service entitling consumers to free information and financial planner advice. (www.AmericaSaves.org). They can also access Practical Money Skills for Life (PMSFL), Visa's award-winning, online personal finance curriculum for consumers of all ages and financial needs. It is available in English, Spanish and Chinese and can be accessed for free at www.practicalmoneyskills.com.

The survey was administered by the Opinion Research Corporation to a representative sample of 1,031 adult women in mid-November, 2004. The survey's margin of error is plus or minus three percentage points.