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Even before the pandemic hurt the U.S. economy, about one-third of American families didn't have enough money set aside to cope with a "mid-sized financial shock," according to a Stanford and George Washington University study.

The study, based on a January 2020 survey, also found that people with some college education were often more vulnerable than those without any education because of high debt obligations.

The FINRA Foundation, created by the Financial Industry Regulatory Authority, funded the Financial Resilience in America study, which was done just before the COVID-19 financial crisis hit in March 2020. (FINRA regulates all securities firms doing business in the United States.)

Ultimately, a huge proportion of America's diverse population is financially insecure, and the uncertainty and turmoil of the COVID-19 pandemic have only made financial resiliency even more crucial moving forward, the study found.

The study examined unplanned expenses for households in 2020, and debt and savings levels for households in 2018.

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It found:

  • If an unexpected need arose, 27% of households in 2020 and 31% in 2018 said they would not be able to come up with $2,000 to cope with the problem.
  • In 2018, 37% of households carried too much debt.
  • Nearly half (46%) of households in 2018 said they didn't have an emergency or rainy-day fund that would cover expenses for three months in case of sickness, job loss, economic downturn or other emergencies.

Though a large proportion of Americans have shown they lack financial resiliency in recent years, the numbers were even higher about a decade ago.

In 2012, 39% of households couldn't come up with $2,000 for unexpected needs, 42% of survey respondents felt they were in too much debt, and 60% could not come up with three months of emergency money.

What populations are vulnerable?

Certain populations of Americans are particularly vulnerable to economic downturns, the study found. 

For example, women and minorities face higher levels of financial uncertainty, and Black Americans are the least financially resilient, followed by Hispanic Americans.

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The universities also found that as Americans got older and more educated, they were more likely to have emergency savings and demonstrated more financial resiliency.

But the trend is reversed when it comes to debt: The most disadvantaged group was millennials with some college experience. 

Half of 30- to 44-year-olds and 41% of people with some college felt as if they were in too much debt.

People with and without college degrees actually report similar difficulties in cash flow.

For example, 19.9% of Americans with no college degree and 16.2% of those with a college degree have "difficulty making ends meet" for their needs.

But only 4.1% of those with a bachelor's degree are below the poverty line, as opposed to the 16.7% of Americans with a high school degree or lower, suggesting that college graduates have higher costs of living and higher levels of debt.

Cash flow among 30- to -44-year-olds was almost exactly the same proportion as those of Black and Hispanic Americans when it comes to "difficulty making ends meet" and "difficulty covering all expenses and paying all bills," the survey found. 

"They (30- to 44-year-olds) have high debt burdens (attributed primarily to student loans), child care costs, and mortgages. The debt-to-income ratio for this group is high, at 136%, compared to 82% for those under age 30 or over age 60," according to the study paper.

Essentially, college-educated millennials make more money, but their debt obligations place them at a similar level of financial resiliency as historically marginalized minority groups, the study found. 

Black and Hispanic Americans and those without a college degree face lower initial debt levels but are often subject to predatory borrowing schemes and pay high levels of interest because of a lack of financial literacy, according to the survey.

Michelle Shen is a Money & Tech Digital Reporter for USATODAY. You can reach her @michelle_shen10 on Twitter.

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