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Financial emergency finds most unprepared

Even after the jolt of the Great Recession, a new study finds that most Americans are not financially prepared for an emergency.

A survey by financial data publisher found that only 24 percent of consumers have the recommended cushion of at least six months' expenses set aside. The vast majority aren't ready for contingencies; another 24 percent don't have any emergency savings at all.

With 6.2 million people out of work for half a year or longer, the results underscore just how unprepared many are at a time when both job security and the economy pose concerns.

"The majority of Americans still have much work to do in building an adequate emergency savings cushion," said Greg McBride, senior financial analyst for Bankrate.

The survey results are somewhat surprising, he said, in that the high rates of both joblessness and under-employment dating to the 2007-09 recession have driven home the need for emergency savings. Yet the challenges of the economy and job market also have limited the ability to sock money away for unexpected expenses.

Respondents under age 30 and those with annual incomes under $30,000 were the most likely to report having no emergency savings whatsoever. Those likeliest to have six months' expenses in an emergency fund were higher-income households and people in their 50s and 60s.

Fewer than half of those who participated in the poll had at least three months' expenses in emergency savings -- unchanged from 2007 results.

Discipline is key in building up emergency savings, McBride said.

The takeaway for consumers, he said, should be to start putting more money away with every paycheck. If they build their savings by paying themselves first via automatic deposit, they will gradually move closer to the six-month savings level and also force themselves to spend less.

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