Recently, the Federal Reserve Board released its latest “Report on the Economic Well-Being of U.S. Households,” which generally found that most adults in the country are feeling financially comfortable. The finding that media outlets hooked into was how respondents would handle a $400 emergency expense, which about 40 percent said they wouldn’t be able to handle with cash or a credit card to be paid in full by the end of the billing cycle.
The Atlanta Regional Commission’s annual Metro Atlanta Speaks survey has asked a similar question since 2016. In the 13-county region, about 52 percent of us currently would actually be able to handle a $400 expense with cash, check or debit, as shown in the chart to the right. This number is slightly up from 2016, when just under 50 percent of respondents said they could handle the expense with upfront payment. The chart to the right shows the metro-level responses, and the map and graph below show how the cash response plays out across the metro.
Suppose you had to come up with $400 for an emergency. Which of the following best describes how you would handle such a situation?
Data from the 2018 Metro Atlanta Speaks Survey
Areas where residents most likely to be able to handle an unexpected $400 expense with cash
(2018 Metro Atlanta Speaks survey)
As the map to the left shows, residents of Fayette, Paulding and Cobb counties are most likely to have funds immediately at hand to absorb a $400 emergency expense. Fayette County comes in at #1, among regional counties, with 61 percent of respondents saying they could handle the expense with cash or the equivalent.
The jurisdiction where residents are least likely to have $400 cash on hand for an emergency is Clayton County, where just 39% of respondents said they could handle the expense with money in their bank account. DeKalb and Butts County follow, where 46 and 48 percent of respondents, respectively, said they could handle the $400 expense with cash.
Note that a nearly equal number of respondents in (a) the City of Atlanta and (b) Fulton County said they could pay the expense in cash, so those two areas fall into the same category on the map.
% of respondents who can handle an unexpected $400 expense “with cash”, by geography
Not being able to pay with cash does not, however, mean that residents are heading first to credit cards. As the chart below shows, Cherokee County followed by DeKalb County are the places where residents are most likely to turn to a credit card to handle an unexpected expense. Residents in Clayton County, followed by those in the City of Atlanta, are most likely to say they would simply not be able to handle the expense at all.
All chosen payment options for a $400 emergency, by geography
The map to the right shows where the metro’s most cash-strapped residents live. Notably, the pattern is not simply the inverse of where residents are most likely to pay cash for an emergency expense. To some extent, this shows how important a line of credit can be when it comes to handling an emergency expense.
One important difference between the Federal Reserve’s report and the Metro Atlanta Speaks survey is that the national survey does not differentiate between using a credit card that is paid off within the billing cycle and using cash — in other words, if you pay off your credit cards monthly, the Fed’s survey considers that the same as a cash payment. Metro Atlanta Speaks, on the other hand, treats a line of credit as its own response category regardless of whether respondents pay off the bill monthly. This may mean that some of our respondents can absorb an unexpected expense with cash but choose to put it on a card that they pay at the end of the month.
Areas where residents are most likely to say they are unable to pay an unexpected $400 expense
Want to know more about who can and can’t handle an emergency expense, including breakdowns by gender, living north or south of I-20, and whether respondents own or rent? Visit the Metro Atlanta Speaks Data Dashboard to see comprehensive data back to 2016 for this and other questions.