Less than half (48%) of U.S. adults say they have enough emergency savings to cover at least 3 months worth of expenses, according to Bankrate’s 2023 Annual Emergency Savings Report, published June 22.
That’s almost unchanged from the 2022 report, where 49% said the same as inflation was at a 40-year high.
Bankrate has been publishing its yearly emergency savings report, an exclusive survey by Bankrate and polling partner SSRS, since 2014. The most recent data, polled in May 2023, also examines people’s comfort with their level of emergency savings and how often they add money to their savings fund.
“The economic gyrations over the past four years have underscored the importance of having emergency savings, with an increasing share of Americans thinking it will take a bigger savings cushion to feel comfortable with it,” said Bankrate Chief Financial Analyst Greg McBride.
Because building savings takes time, McBride recommends people automate contributing to their savings accounts as much as possible. “Successful saving is all about the habit. Regular contributions such as a direct deposit from your paycheck or an automatic monthly transfer into an online savings account lead to a higher level of emergency savings and greater comfort level with it,” McBride said.
While there are plenty of eye-opening statistics within the research, here’s a closer look at some of the key findings.
1. Discomfort with savings is high. 57% of U.S. adults are uncomfortable with the amount of emergency savings they currently have. One-third (33%) report being “very uncomfortable” and 24% are “somewhat uncomfortable” with their level of emergency savings.
2. Fewer have no emergency savings. 22% of U.S. adults have no emergency savings at all, the second lowest percentage in 13 years of polling. That’s actually down slightly from 23% who said the same in 2022.
3. Growing debt is hurting savings. As of January polling, 36% have more credit card debt than emergency savings, a record high since 2011. 51% have more emergency savings than credit card debt.
4. Inflation, unemployment get blame. As of December polling, 74% say economic factors are causing them to save less right now, including 68% who say inflation is to blame (up from 49% last year) and 44% who say changes in income and employment are holding them back.
5. Inflation’s impact expanding. The number of people who have not had their savings impacted by inflation nearly halved since January 2022. Only 17% of people said that inflation and rising prices are not impacting their savings, significantly down from 33% who said so in January 2022.
6. Younger Americans predictably lagging in emergency savings. Younger Americans, who are less likely to have adopted the automated saving habit, are much more likely to have little to no emergency savings. Nearly one-third (31%) of Gen Zers (ages 18-26) do not have emergency savings—more than twice as many as the 15% of Boomers (ages 59-77) who have no emergency savings. Boomers are also more than three times as likely to have enough savings to cover six months or more of expenses as Gen Zers (47% to 13%, respectively). More than half (56%) of Boomers are comfortable with their level of emergency savings, an 18% leap above Gen X (ages 43-58), the generation with the second-highest comfort level. In comparison, 32% of Gen Zers and 37% of Millennials (ages 27-42) are comfortable with their level of emergency savings.
7. Southerners most likely to have no emergency savings. Geographically, Westerners (55%) and Midwesterners (52%) are most likely to have enough emergency savings to cover three months of expenses or more compared to Southerners (42%) and Northeasterners (47%). While Northeasterners were the second-most likely in Bankrate’s poll to have no emergency savings, they’re contributing more frequently. Just under two in five (38%) of Northeasterners add to their emergency savings every paycheck, the most of any region. By comparison, 31% of Midwesterners, 29% of Southerners and 23% of Westerners add with every paycheck.
SEE ALSO:
• Emergency Savings and Retirement Planning Tightly Linked
• 80% of Older Americans Cannot Afford a Financial Emergency
• How Certain SECURE 2.0 Provisions Can Ease Participant Retirement Savings Challenges