Per BI

Almost half of Americans decreased their emergency savings accounts from a year ago compared to today. A new survey by Bankrate which took place from January 20 to January 23, found that 39% of participating US adults have seen a drop in their emergency savings.

The Bankrate survey also showed that although almost half of US adults saw a reduction in emergency savings, 10% didn't have any emergency savings left this year and last year. Only almost a quarter of participants shared that they saw better results this year than last year.

Bankrate, a senior economic analyst Mark Hamrick gave a statement to Business Insider sharing how Americans needed to have emergency savings to protect them against things that could happen. Hamrick acknowledged that Americans went through "remarkable challenges."

Hamrick: "The reality is that we need to have emergency savings to protect against all kinds or virtually any kind of unexpected expense... essentially to the unemployment lines, the virtual unemployment lines in two months, March and April of 2020."

Bureau of Economic Analysis data showed that the personal saving rate reached a 2.7% low in June, dropping further in 2022. The January rate of this year returned to January 2022 rates of 4.7%.

Hamrick: "Many have resorted to tapping their emergency savings if they have it, or have taken on credit card debt, or some combination. Adding to the challenge is the record high level of credit card interest rates, punitive for those who fail to pay off their balances immediately."

In January 2023, American personal savings dropped to their 17-year low while household debt climbed. In October 2022, the Commerce Department saw the disposable income saving rate dropped to 2.3%.

Gen Z retirement savings average just $33,000 in median retirement savings. Baby Boomers had the highest median savings at $162,000, with Gen X at $87,000.

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Resources:

Business Insider

Business Insider

Bureau of Economic Analysis