You might imagine that more people would feel flush with a few Benjamins in the bank.

After all, the Dow Jones Industrial Average broke above 27,000 for the first time ever in July. The country's jobless rate hit 3.7% in June – the kind of lows we saw the year that man first walked on the moon.

So why are we hearing that so many households cannot cover even a small emergency?

Four out of 10 households maintain that they would have trouble paying $400 for an unexpected expense, according to a Federal Reserve Board measure of financial well-being in 2018. The study was released in May.

About 17% of households with more than $100,000 in income say that they'd find it tough, too.

It's a shocking number, especially when one considers that we're living through the longest economic expansion in the United States. The expansion officially began in June 2009 and now has surpassed the 120-month record set from March 1991 to March 2001.

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Why don't you have $400 for emergencies?

What gives? Are many of us just miserable money managers?

Let's face it, $400 is peanuts when something goes haywire. It won't even cover the average car repair bill that's likely to run around $500 to $600, according to a AAA survey.

It's not that all these people don't have any money sitting on the sidelines. It's more complicated and like a lot of surveys, one needs to carefully review the entire question.

How prepared people feel depends a great deal on how burdened they are by bills.

Unfortunately, even during strong economic times, many people are already juggling so many other bills that they just can't imagine adding one more bill onto the pile, according to new research by the Center for Retirement Research at Boston College.

In fact, the research concluded, some of these households actually do have enough money in savings, but many feel constrained by credit card debt and other bills.

Often, researchers said, people who have some savings tend to mentally allocate some of that money toward upcoming expenses – maybe next month's mortgage payment, the minimum payments on the credit card bills, paying student loan debt or maybe even saving up for new tires by winter.

Once the bills are covered, they don't have much wiggle room.

"After accounting for all those expenses, they know they won't have $400," said Anqi Chen, assistant director for savings research for the Center for Retirement Research at Boston College.

The center's study, which was released in July, concluded that many who say they would have trouble paying a $400 emergency bill are dealing with credit card balances, installment loans, mortgages and student loan debt.

"These loan payments, which constrain their household budgets, could explain why so many middle- and higher-income households do not have precautionary savings," Chen wrote.

When faced with an emergency, 27% would borrow or sell something to pay for the expense. And 12% would be unable to pay the expense by any means, according to the Fed's Report on the Economic Well-Being of U.S. Households in 2018.

Many people struggle to pay their actual bills right now.

Even without a surprise bill, the Fed study revealed, 17% of adults expected to forgo payment on some of their bills in the month of the survey.

What did the Fed really ask?

The specific question asked in the Federal Reserve survey goes as follows: "Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense?"

If someone says they would need to "borrow, sell, stop paying other bills, or just would not be able to pay," they are considered unable to cover small emergencies.

If someone would need to stop paying other bills just to cover a small emergency, Chen said, they're in a financially fragile spot.

As part of her research, Chen dug into more data.

About 20% of households – not 40% – actually have less than $400 in their checking and savings account, Chen pointed out. That's based on another Federal Reserve study called the Survey of Consumer Finances.

Not surprisingly, perhaps, this group tends to be more concentrated among lower income households, she said.

Only 1% of households with more than $100,000 in income actually couldn't go to their bank accounts to get the Blue Stripes.

Still, the Fed report on economic well-being had some good news: When faced with that hypothetical expense, 61% of adults surveyed in 2018 said they would pull out cash, tap into savings or use a credit card (which they'd pay off in full at the next billing statement).

That's up from 59% in a similar study for 2017. And it's up from 50% in 2013.

Why does a $400 hypothetical bill matter?

The bigger concern is that if people are having trouble with their day-to-day expenses, Chen said, they're not setting aside money to address long-term retirement needs.

Disadvantaged consumers who make too little money might not be able to save any more than they do. For many of these consumers, Social Security is enough to replace the majority of their preretirement income levels, she said.

Consumers with very low incomes and a high school degree or less represented the bulk of those who say they would not be able to pay the $400 expense. That group amounted to 64% of those not prepared for emergencies, according to the study out of Boston College. The median income for that group: $24,511.

But others who make more money but face higher expenses may need new strategies to encourage retirement savings.

Retirement experts are more frequently raising the idea of something called "sidecar accounts," which would package a rainy day fund with a more traditional retirement account. Consumers would be able to save through payroll deduction for both emergencies and retirement at once.

How much you can save for retirement, Chen said, hinges on a host of decisions made over a lifetime.

"You don't start wondering how to prepare for retirement at 65," she said.

Ideally, you take into account how much outside savings you'd be able to build if you buy a bigger house or take a vacation every year.

Sometimes, you're taking on debt to reach a bigger goal. You may take on a bigger mortgage to live in a better school district. Or you take on student loan debt for yourself or your children on the hope that the college graduate will make more money in the future.

Yet many times, we don't focus enough on the goal of living below our means throughout our lifetime in order to build up savings for the future. We just keep spending and we don't stop.

So take a break and ask yourself whether you'd be able to cover a $400 emergency? If not, time to dig into your own numbers and ask why.

Contact Susan Tompor: 313-222-8876 or stompor@freepress.com. Follow her on Twitter @tompor. Read more on business and sign up for our business newsletter.

This article originally appeared on Detroit Free Press: Nearly half of households can't find $400 to cover an emergency