If you’re concerned about the state of your personal finances, know that you are not alone. In fact, as Market Watch recently reported, you are a member of an ever-expanding club.
According to a report released by the Rockefeller Foundation and Jacob Hacker, a political science professor at Yale University, one in five Americans will experience economic insecurity in 2010.
This statistic represents a 25 year high, and is especially large compared with 1985, when only one in eight people were similarly worried about their finances.
What, exactly, does the report mean by “economic insecurity”? Well, it defines this term as describing those whose available household income fell by at least 25 percent from one year to the next due to a loss in income (or loss of a job) or an increase in medical spending.
Here is a breakdown of some of the report’s most compelling figures:
Professor Hacker, who headed the study, recognized that poor Americans are more affected by economic insecurity than wealthy families. However, he cautioned that, as a whole, levels of insecurity have risen across the board, and that “it’s an issue squarely confronting the American middle class.”
Further, levels of economic insecurity seem to follow the trend of the overall American economy. According to the report, when “the business cycle experiences an upturn, Americans’ odds of suffering a large fall in income decreases.”
However, in a more surprising discovery, the report also found that “this cyclical pattern has been accompanied by a gradual rise in the overall prevalence in economic insecurity in good times as well as in bad.”
As economic insecurity grows, foreclosures on people's homes have become increasingly common. In addition, many families are behind on medical bills, and struggle to pay off their credit cards.
In the midst of this financial turmoil, many Americans have turned to personal bankruptcy to help them press the “reset” button on their finances.