Many Americans have long faced challenges in building emergency savings, and the recent impact of high inflation and rising interest rates, following the COVID-19 pandemic, has only added to these difficulties, making it harder for people to feel secure about their savings.
According to a new Bankrate poll, nearly 6 in 10 (59 percent) U.S. adults are uncomfortable with their level of emergency savings. This percentage has been increasing over the years, climbing from 37 percent in 2018 to 44 percent in 2020, 48 percent in 2021, and 58 percent in 2022. In 2024, it has remained steady at 57 percent compared to the previous year.
These findings come from Bankrate’s annual emergency savings report, a survey conducted by Bankrate in partnership with SSRS. Since 2014, the survey has gathered insights from over 1,000 U.S. adults about their debt levels and emergency savings. The most recent data, collected in May 2024, also explored how much people feel they need to save to feel financially secure and whether they have reached that target.
Conventional financial advice suggests having three months of living expenses saved for emergencies like job loss, and most Americans agree. The vast majority (89 percent) say they would need at least three months of expenses in savings to feel comfortable. However, only 44 percent actually have that amount set aside.
"Emergency savings has long been the Achilles' heel of Americans’ personal finances. Many households lack any savings, and millions are significantly below the amount they need to feel secure," said Greg McBride, CFA, chief financial analyst at Bankrate.
Key Findings from Bankrate’s Emergency Savings Report:
- Most Americans are uneasy about their savings: As of May 2024, 59% are dissatisfied with their emergency savings, with 32% feeling very uncomfortable and 27% somewhat uncomfortable.
- Many have no savings at all: 27% of U.S. adults have no emergency savings, the highest rate since 2020.
- Financial priorities are shifting: 36% of U.S. adults are focusing on both debt repayment and saving for emergencies, the highest since 2018.
- Borrowing remains a fallback: Only 44% of Americans could cover a $1,000 emergency expense using their savings as of December 2023.
- Inflation and interest rates are taking a toll: 63% of adults say inflation is reducing their ability to save for emergencies, and 45% cite rising interest rates as another factor.
These findings underscore the growing financial strain on Americans, making it increasingly difficult to build and maintain an adequate financial cushion.
