It might be a little apropos considering the developing banking crisis as we post this; a recent report from Bankrate.com says an uncertain economy is affecting how Americans are able to save for emergencies. In fact, they say that nearly half (49%) of Americans have less savings (39%) or no savings (10%) compared to a year ago. The data comes from their Bankrate’s yearly emergency savings report which also examines whether people have more credit card debt or emergency savings, and if they’re prioritizing paying down debt or building their emergency savings.
“It is quite stunning that such a high percentage of adults has no savings and no credit card debt…Anyone with no such savings, including those without access to credit, risks tremendous stress, or worse, on their personal finances when hit with a significant unplanned expense such as a major home or auto repair.” Said Bankrate Senior Economic Analyst Mark Hamrick.
Key points:
- Growing debt hurting savings. 36% have more credit card debt than emergency savings, the highest on record since 2011. 51% have more emergency savings than credit card debt.
- Working generation is worst off. More than 4 in 10 of those in their prime working years (age 27-58) say they now have more credit card debt than short-term savings.
- Emergency savings need a boost. Only 43% of U.S. adults would pay for an unexpected emergency expense from their savings, with lower-income households, women and younger generations being less likely than their counterparts.
- Credit card dependency at a record high. 25% of people would accrue credit card debt to pay for a $1,000 emergency expense and pay it off over time — a record percentage since polling started in 2014.
- Inflation, unemployment are to blame. 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.
- Consumer concern is high. 68% of people are worried they wouldn’t be able to cover their living expenses for just one month if they lost their primary source of income, including 85% of Gen Zers — the most concerned of any generation.
Click here to read the full report at Bankrate.com.