Many Americans have long struggled to build emergency savings. However, high inflation and interest rates, since the COVID-19 pandemic, have continued to make it difficult for people to feel comfortable with their level of savings.
Nearly 6 in 10 (59 percent) U.S. adults are uncomfortable with their level of emergency savings, according to a new Bankrate poll. Before 2022, the percentage had been rising, from 37 percent in 2018 to 44 percent in 2020, 48 percent in 2021 and 58 percent in 2022. This year, it’s barely budged from 57 percent in 2023.
This data comes from Bankrate’s yearly emergency savings report, an exclusive survey done by Bankrate and polling partner SSRS. Since 2014, the survey has annually polled 1,000+ U.S. adults about their level of debt and emergency savings. The most recent data, polled in May 2024, also examines how much savings people would need to feel comfortable and if they have that much saved.
Common personal finance advice recommends keeping three months of expenses in a savings account in case of a job loss or other emergency, and Bankrate’s data shows most people agree with that. The vast majority (89 percent) of U.S. adults say they would need at least three months of expenses saved to feel comfortable. Despite that, only 44 percent of Americans actually have at least three months of expenses saved.
Emergency savings has long been the Achilles heel of Americans’ personal finances. More households have no emergency savings and millions of households are far short of the savings they would need to feel comfortable.
— Greg McBride, CFA , chief financial analyst for Bankrate
Bankrate’s insights on emergency funds and personal savings
- Americans want more in savings. 59% of Americans are uncomfortable with their level of emergency savings, as of May 2024 polling, including 32% who are very uncomfortable and 27% who are somewhat uncomfortable.
- But many have no savings at all. 27% of U.S. adults have no emergency savings, as of May 2024 polling — the highest percentage since 2020.
- People are working hard on their finances. 36% of U.S. adults are prioritizing both debt repayment and building emergency savings, as of January 2024 polling, as opposed to just focusing on one. That’s the highest percentage since 2018.
- Many would borrow in an emergency. Only 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings, as of December 2023 polling.
- Inflation is a common culprit that’s affecting savings. 63% of U.S. adults say inflation is causing them to save less for unexpected expenses, while 45% say the same of rising interest rates, as of December 2023 polling.
Over 1 in 4 people have no emergency savings
Keeping at least three months of expenses saved can help you weather a job loss, major unexpected bill or other sudden expense. However, 27 percent of U.S. adults have no emergency savings at all, the highest percentage since Bankrate asked the question in 2020.
Generationally, Americans vary widely in their emergency savings levels. Over 1 in 3 (34 percent) millennials have no emergency savings, the highest percentage of any generation:
- Gen Zers (ages 18-27): 29 percent
- Millennials (ages 28-43): 34 percent
- Gen Xers (ages 44-59): 31 percent
- Baby boomers (ages 60-78): 16 percent
Source: Bankrate survey, May 17-20, 2024
Almost 3 in 10 (29 percent) of people have some savings, but not enough to cover three months’ expenses. That percentage hasn’t changed much since 2022 and 2023, when 28 percent and 30 percent of people said the same, respectively.
Today, that percentage is far higher for some generations, specifically Gen Zers. More than 2 in 5 (44 percent) Gen Zers have some savings, but less than would cover three months of expenses, the most of any generation.
Lastly, only 28 percent of people have at least six months’ expenses saved, down from 30 percent in 2023. Another 16 percent of people have between three and five months’ expenses saved, the lowest percentage since 2018.
How to start saving now
If you’re one of the 27 percent of Americans with no emergency savings, know it’s not too late to start. Bankrate’s savings guides can show you how to begin today, even if you’ve never opened a savings account before.
How to start saving
Nearly half (46 percent) of baby boomers have at least six months of expenses saved. Bankrate Chief Financial Analyst Greg McBride points out that building an emergency savings cushion doesn’t happen overnight, so the years baby boomers have had to save puts them ahead compared to other generations.
But even if you haven’t had decades to save, it’s not too late to start saving more today.
“To establish an emergency savings cushion, or add to what you have, set up a direct deposit from your paycheck or an automatic transfer from your checking account into a dedicated savings account,” McBride says. “Automating the savings is the key to making it happen, particularly with household budgets so tight.”
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Without the income to funnel into savings, lower-income households are more likely to have no emergency savings than higher-income households. Nearly half (46 percent) of households with an income under $50,000 per year have no emergency savings, compared to only 7 percent of those making $100,000 per year or more:
We asked: How much do you have in emergency savings – that is, money that is readily available in either a checking account, savings account, or money market?
Annual income of less than $50,000 Annual income of $50,000-$74,999 Annual income of $75,000-$99.999 Annual income of $100,000 or more Source: Bankrate, May 17-20, 2024 No emergency savings 46% 19% 7% 7% Some, but less than would cover 3 months’ expenses 32% 33% 31% 22% 3 to 5 months’ expenses 11% 18% 24% 21% Enough to cover 6 months’ expenses or more 11% 30% 38% 50%
Over half of Americans are uncomfortable with their level of emergency savings
Just under 6 in 10 (59 percent) U.S. adults are uncomfortable with their emergency savings, including 32 percent who are very uncomfortable and 27 percent who are somewhat uncomfortable. On the other hand, 41 percent are comfortable with their emergency savings, including 14 percent who are very comfortable and 28 percent who are somewhat comfortable.
Two-thirds (66 percent) of Gen Xers are uncomfortable with their emergency savings, the highest percentage of any generation (compared to 63 percent of Gen Zers, 60 percent of millennials and 51 percent of baby boomers:
Source: Bankrate survey, May 17-20, 2024
The high percentage of people uncomfortable with their emergency savings can be attributed, in part, to rising inflation. In 2021, 48 percent of people said they were uncomfortable with their level of emergency savings. The next year, as inflation rose, the percentage jumped to 58 percent. Inflation has remained stubbornly high, and the percentage of people uncomfortable with their savings has since plateaued:
- 2020: 44 percent
- 2021: 48 percent
- 2022: 58 percent
- 2023: 57 percent
- 2024: 59 percent
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Higher-income households tend to be more comfortable with their emergency savings than lower-income households. More than half (56 percent) of households with an income of $100,000 per year or higher say they’re comfortable:
- $100,000 per year or more: 56 percent
- $75,000-$99,999: 48 percent
- $50,000-$74,999: 45 percent
- Less than $50,000 per year: 30 percent
Majority needs at least 3 months of expenses saved to feel comfortable
The majority (89 percent) of Americans say they would need at least three months of expenses saved in order to feel comfortable. Moreso, 63 percent would need to have at least six months of expenses saved to feel comfortable and 26 percent would need between three and five months of expenses saved.
Most generations roughly agree they would need at least three months of expenses saved to feel comfortable. However, 72 percent of baby boomers and 70 percent of Gen Xers would need at least six months of expenses saved, higher percentages compared to younger generations:
Source: Bankrate survey, May 17-20, 2024
Amount of savings versus comfort with savings
People who have at least three months’ worth of emergency savings tend to be most comfortable with their amount of savings. Nearly three-quarters (72 percent) of U.S. adults comfortable with their emergency savings have enough to cover at least three months of expenses. Specifically, 52 percent of people comfortable with their level of emergency savings have at least six months of expenses saved.
On the other hand, 40 percent of people who are uncomfortable with their emergency savings have no emergency savings and 36 percent have something saved, but less than three months of expenses.
As of January 2024, more than 1 in 3 Americans have more credit card debt than emergency savings
More than one in three (36 percent) U.S. adults had more credit card debt than money saved in an emergency savings account in both 2023 and 2024. But, the majority (55 percent) of U.S. adults have more emergency savings than credit card debt. That’s up from 51 percent in 2023 and is the highest percentage since 2018.
Additionally, 10 percent of Americans have no credit card debt or emergency savings at all, the lowest percentage in the poll’s 14-year history:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, January 19-21, 2024
Millennials and Gen Xers are more likely than other generations to have more credit card debt than emergency savings:
- Gen Zers: 32 percent
- Millennials: 46 percent
- Gen Xers: 47 percent
- Baby boomers: 24 percent
Average credit card rates, as of May 2024, are at a record high. If you’re carrying a credit card balance this year, you may end up paying a great deal of money in interest.
“Financing purchases at 20 percent interest rates is a sign of the financial strain millions of households are feeling,” McBride says.
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Women are more likely than men to have more credit card debt than emergency savings, or to have neither:
We asked: Thinking about the amount of credit card debt you now have and the money you have in your emergency fund or savings account, which is higher?
Gender Credit card debt Emergency savings No credit card debt and no emergency savings Source: Bankrate Women 40% 48% 12% Men 31% 62% 8% Additionally, the likelihood of having more emergency savings than credit card debt rises with income:
We asked: Thinking about the amount of credit card debt you now have and the money you have in your emergency fund or savings account, which is higher?
Year income Credit card debt Emergency savings No credit card debt and no emergency savings Source: Bankrate Less than $50,000 42% 40% 18% $50,000-$74,999 39% 57% 4% $75,000-$99,999 38% 59% 4% $100,000 or more 21% 78% 1%
Americans want to improve both their debt and savings
Regardless of their financial situation, more people this year want to tackle both debt and savings, compared to last year: 36 percent of U.S. adults are prioritizing both paying down debt and increasing emergency savings right now. It’s the highest percentage in seven years, and up slightly from 2023, when 34 percent of people said the same.
When picking between the two, more people are prioritizing emergency savings. Around one in four (28 percent) people are prioritizing boosting emergency savings, but that’s the lowest percentage yet in Bankrate’s polling. Another 25 percent are paying down debt, up from 23 percent in 2023:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, January 19-21, 2024
“Recognizing that the cost of carrying debt has increased significantly in the past two years and the insufficient level of emergency savings, more Americans are focusing on both paying down debt and boosting emergency savings simultaneously, rather than one to the exclusion of the other.” McBride says. “Having a direct deposit from your paycheck into a dedicated savings account automates the savings, allowing you to channel your take home pay toward the goal of paying down debt.”
All generations were more likely to prioritize both on paying down debt and increasing emergency savings, rather than only focusing on one. Notably, 43 percent of millennials are prioritizing paying both at the same time, while 22 percent are only paying down debt and 29 percent are only increasing emergency savings.
Nearly 1 in 3 people have more emergency savings than they had a year ago
Though many Americans report having higher credit card debt than emergency savings, people are saving more this year overall. Almost a third (30 percent) of U.S. adults have more emergency savings now than they had a year ago, the highest percentage in Bankrate’s polling since 2020.
Another 32 percent of people have less emergency savings than they did last year — down from 39 percent in 2023, and the lowest percentage in five years.
Another 29 percent have the same amount of emergency savings as last year and 9 percent had no emergency savings last year or this year:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, January 19-21, 2024
As of December 2023, more than half of Americans wouldn’t pay for a sudden $1,000 bill from their emergency savings
The majority (56 percent) of U.S. adults wouldn’t pay for an emergency expense of $1,000 or more, such as an emergency room visit or unexpected car repair, from their savings account. The percentage of people who would pay from their savings has barely changed over the past three years:
- 2024: 44 percent
- 2023: 43 percent
- 2022: 44 percent
If they don’t pull the funds from savings, the second-most common option (21 percent) would be to finance the expense from a credit card and pay it off over time. Others would reduce their spending on other things or take out a loan:
Source: Bankrate survey, December 15-17, 2023
“All too many Americans continue to walk on thin ice, financially speaking, with fewer than half indicating they would pay an emergency expense of $1,000 or more from savings,” Bankrate Senior Economic Analyst Mark Hamrick says. “Inflation has been a key culprit standing in the way of further progress on the savings front. Fortunately, rising interest rates have also provided more generous returns on savings.”
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Men, older Americans and higher-income or highly-educated households are all more likely to say they would pull from savings for an emergency $1,000 expense. Men are only slightly more likely than women to say they would use their savings:
- Men: 47 percent
- Women: 43 percent
Baby boomers are far more likely to say they would use their savings for an emergency expense, compared to younger generations:
- Gen Zers: 31 percent
- Millennials: 43 percent
- Gen Xers: 36 percent
- Baby boomers: 59 percent
People with a college degree (or more) are more than twice as likely to say they would pay the costs from their savings than those with at most a high school diploma:
- High school diploma or less: 29 percent
- Some college education: 40 percent
- College degree or more: 64 percent
Far more households with a yearly income of $100,000 or more say they would pay for a $1,000 emergency bill with savings:
- Less than $50,000 per year: 26 percent
- $50,000-$74,999 per year: 41 percent
- $75,000-$99,999 per year: 58 percent
- $100,000 per year or more: 70 percent
Nearly 2 in 3 Americans say rising prices are causing them to save less as inflation’s impact lingers
The majority (63 percent) of Americans say high inflation is causing them to save less. They also commonly cited rising interest rates and changes in income or employment:
- High inflation: 63 percent
- Rising interest rates: 45 percent
- Change in income or employment status: 41 percent
- Anything else: 42 percent
Rising interest rates can make your monthly debt payments more expensive, but high interest rates aren’t always harmful — someone taking advantage of a savings account with interest could benefit from higher rates. Accordingly, 19 percent of people say rising interest rates are causing them save more for unexpected expenses:
Source: Bankrate survey, December 15-17, 2023
Though inflation has a major impact on saving habits, inflation is now far lower than it was in 2023. The percentage of people who say inflation caused them to save less is lower, too, from 68 percent in 2023 to 63 percent in 2024.
“Inflation’s once-in-a-generation surge has left its mark on American savings habits,” Hamrick says. “There is a glimmer of hope, however, with word that 19 percent of Americans cite rising interest rates as the reason they’ve saved more.”
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Women are significantly more likely to say inflation is causing them to save less than men:
- Men: 58 percent
- Women: 67 percent
Gen Xers were unlikely (at 36 percent) to say they would pay for a $1,000 emergency expense with savings. They’re also the generation most likely to say inflation is why they’re saving less:
- Gen Zers: 57 percent
- Millennials: 66 percent
- Gen Xers: 69 percent
- Baby boomers: 58 percent
Households with an income of $100,000 per year or more were the least likely to say inflation is why they’re saving less:
- Less than $50,000 per year: 67 percent
- $50,000-$74,999 per year: 63 percent
- $75,000-$99,999 per year: 65 percent
- $100,000 per year or more: 55 percent
3 tips on building your emergency fund amidst high inflation
Building an emergency fund can be a lifeline if your income decreases or you lose your job. Here are three tips on how to start and maintain an emergency fund to prepare for uncertainty.
1. Figure out how much you need in emergency savings
Experts commonly recommend saving three to six months of expenses in case of emergencies. For example, if your monthly bills total $2,000 a month, saving $6,000 will allow you to pay your bills for a short time if you lose your main source of income. This is not a concrete rule; you may need to save more if you are self-employed and anticipate a lean month, or if you are preparing for a major lifestyle change, like an upcoming move or a new baby.
2. Open a savings account just for emergencies
Different emergency funds allow you to protect your savings and allow you quick access when you need the money. An online savings account, money market account, money market mutual fund or a separate savings account with your existing bank or credit union can allow you to save emergency funds for the future.
3. Make a budget around savings
You may already have a budget in place to make room for saving more, but make sure you stick to your good habits. Rebuilding your savings, or starting to save for the first time, can be easier by automatically transferring money to your savings each month or taking on side hustles for more income.
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The study (that was conducted May 2024) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from May 17 – May 20, 2024 among a sample of 1,032 respondents. The survey was conducted via web (n=1,000) and telephone (n=32) and administered in English (n=1006) and Spanish (n=26). The margin of error for total respondents is +/- 3.5 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
The study (that was conducted January 2024) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from January 19 – January 21, 2024 among a sample of 1031 respondents. The survey was conducted via web (n=1001) and telephone (n=30) and administered in English (n=1005) and Spanish (n=26). The margin of error for total respondents is +/- 3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
The study (that was conducted December 2023) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from December 15 – December 17, 2023, among a sample of 1036 respondents. The survey was conducted via web (n=1006) and telephone (n=30) and administered in English (n=1010) and Spanish (n=26). The margin of error for total respondents is +/-3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
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