Peter Dunn

Special for USA TODAY

The following is not breaking news: You will have financial emergencies. They will be big. They will be small. And the small ones can create big ones ... if you haven’t mastered the art of financial triage.

Fewer than 38% of Americans have at least $1,000 in savings. Allow this statistic to paint a single picture — at least 62% of Americans are susceptible to major damage when a financial emergency arises. We shall call this the "a big problem causes a bigger problem" statistic.

The problem is twofold. First, is our general lack of margin and our lack of understanding of margin. Margin is the difference between what we’re paid and what we spend. We can create margin by reducing our spending or increasing our income. More on that in a moment. But if a person doesn’t have $1,000 to his/her name, it generally means they never had margin, never knew about margin, or never cared about margin. If that’s the case, a good month is used to exhale, not prepare. When we live paycheck to paycheck and we’re always holding our figurative breath, a good month (higher margin) often doesn’t translate into measured results. The stress that accompanies a low-margin environment begs for stress-relief, thus we use the margin to blow off steam.

If we know financial emergencies are going to happen, without exception, we should have a plan for them. That’s our second problem. We don’t plan for them.

Bad stuff happens. But the real emergency is rarely the event itself. Instead, it will be our reaction to the event.

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Take, for instance, an unexpected car repair or the death of a major kitchen appliance. According to the "a big problem causes a bigger problem" statistic, 62% of us can’t fund the necessary expenditure. So what now?

A deeper examination of creating margin is now warranted. You can either spend less on what you consider to be normal expenditures, or acquire more income to make up for the new expense. Easy, right? Not really. While spending less or earning more is a simple concept, it’s not easy. If you live paycheck to paycheck and an unexpected $1,000 expense comes to say hello, it’s not as though most people could cut spending by $1,000 in the moment. If they could, they may not be in the conundrum they find themselves in. And summoning additional income from the galaxy isn’t exactly common sorcery.

That’s why the unprepared borrow. And if the borrower isn’t prepared to pay back the money, then he becomes the unprepared borrower. Not to get overly dramatic here, but being an unprepared borrower is stage one of a financial death spiral.

If you’re forced to borrow in order to fund your financial emergency, be sure to have an aggressive plan to get back out of debt. The process should look like this: Emergency, determine whether immediate spending changes or income changes can immediately fix the problem, grab money from savings if available, borrow money for emergency while concurrently creating a plan to pay off the debt in a specific period of time, and then pay off the debt in a specific period of time. If you happen to have the money in your savings, you’re not off the hook. You still must have a plan to build your savings balance back up.

If you’re able to collect your wits, you do have the opportunity to turn a financial emergency into the catalyst for financial stability. Upon facing an emergency and being forced to find and create margin to fund it, you will have developed the ability to find and create margin. Jackpot. This newfound skill will serve you brilliantly the rest of your life.

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If you don’t leverage your emergency to create stability, you’re going to find yourself in deeper and deeper trouble. I believe the lack of understanding of both emergency expense planning and margin creation is one of the primary reasons why people never turn their financial lives around.

No, I didn't just jinx you with a financial emergency. Don’t blame me when an emergency shows its ugly face. Just be prepared. It’s coming.

Peter Dunn is an author, speaker and radio host. Have a question about money for Pete the Planner? Email him at AskPete@petetheplanner.com