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New study shows most Americans can't handle unplanned expenses

Money savings

In case of a fire, flood or even just a flat tire, when something unexpected happens, an emergency fund is smart thinking but the fact is most people don't have one.

According to a report from bankrate.com, only 39 percent of Americans say they're able to pay for an unplanned expense. 19 percent of people said they would pay with their credit card. 13 percent said they would cut down on their spending, 12 percent said they would borrow from a family or friend, and 5 percent would take out a loan.

Palfini Financial in Redding has been in the business since 1986, giving advice on retirement saving and financial planning.

Ted Palfini explained why people don't always have an emergency fund.

"For most people, they're using their credit cards for emergency funds but I'm watching most of our successful clients what they're doing is they have the structure they have the discipline to put away money on a monthly base," said Palfini.

For some in the Northstate, the need to save is important because of the present danger of wildfires and flooding.

"Emergency fund, according to the facts and figures, say 3-6 months worth of income or you can use the expenses of the household. The expenses not considering going out to eat, living expenses the basics," said Palfini.

The American Red Cross also offers help with financial assistance in the case of emergency.

According to Steve Walsh from American Red Cross, for a single family fire, they offer a fixed amount of financial assistance per person in the home after a fire. For wildfires, they provide food and shelter, but not a financial assistance.

Palfini said setting aside those emergency funds requires discipline.

"Overall it's willpower. There's a hole, there's a discipline and a willpower of not spending everything that you make and always putting something away for a rainy day"

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