Whether it's a broken water heater, an unexpected medical bill or a car wreck, emergencies happen to everyone. But a startling number of Americans are unprepared to cope with them, money-wise.
According to Bankrate's latest financial security index survey, 34 percent of American households experienced a major unexpected expense over the past year. However, only 39 percent of survey respondents said they would be able to cover a $1,000 setback using their savings.
"While tapping savings to pay off an emergency was the most common response, more than a third of Americans would sink into one type of debt or another, potentially harming their financial security," Bankrate says in the report.
Using a credit card was the second most popular answer, with 19 percent of respondents saying they'd deal with an emergency with plastic and pay it off over time.
The numbers aligned with respondents' annual incomes. "Lower wage earners, those making less than $30,000 a year, were twice as likely to use some form of borrowing than savings, while households making more than $50,000 were more apt to use cash," Bankrate says.
A similar 2016 GOBankingRates survey found that 69 percent of Americans had less than $1,000 in total savings and 34 percent had no savings at all.
The simple solution to keep an unexpected expense from bankrupting you or putting you into debt is to build an emergency fund. But that doesn't always take precedence as Americans focus on staying on top of bills, paying off debt and working toward other financial goals.
However, even if you're in the red, it's still smart to put some money away. Personal finance expert Dave Ramsey says building a $1,000 emergency fund is the first "baby step" toward getting free from debt, because something is always bound to go wrong, no matter how careful you are.
"Car blows up. Transmission goes out. You bury a loved one. Grown kids move home again. Life happens, so be ready," Ramsey writes in "The Total Money Makeover." "This is not a surprise."
Building a solid emergency fund first is crucial because it prevents a twist in the track from completely derailing the journey, Ramsey explains.
"I discovered that people would stop their whole Total Money Makeover because of an emergency — they felt guilty that they had to stop debt reducing to survive," he writes. "If you use debt after swearing off it, you lose the momentum to keep going."
Although the $1,000 cushion is a good start, most experts recommend socking away at least three to six months' worth of living expenses in a fully funded rainy day account.
And Suze Orman, financial expert and former CNBC host, pushes for even more. Orman recommends putting away between eight and 12 months worth of living expenses to feel truly secure.
"Go back to 2007… You lost your job, you lost everything, you were working on this tech thing and all the startups went down," she said at the eMerge Americas conference in 2017. "Nobody had any money to invest, nobody wanted to touch anything, nobody wanted to IPO because the markets were going down and you couldn't find anything to do. Think it took you just three months to find another job? Think it took you six months to find another job?"
She goes on: "It's not just about the economy. What if you get sick? What if you're hit by a car? What if something happens crazy in this world? We live in the craziest world I've ever seen in my life right now. And the only way you can take craziness out of that if for you to make yourself secure."
Like this story? Like CNBC Make It on Facebook!