Nearly two-thirds of Americans are falling behind on their emergency savings due to soaring inflation and increasing expenses, which leads them with less money available to repay debts, according to a survey released by Bankrate.
By the numbers:
- 62% of Americans feel behind on emergency savings.
- 37% feel significantly behind.
- 26% feel slightly behind.
- 33% have less emergency savings now than at the start of 2024.
- Only 20% have more emergency savings than they did at the beginning of the year.
- 17% have no emergency savings at all — a figure unchanged since the start of 2024.
Generational insights:
- Gen Z (ages 18-26):
- 33% have less savings now.
- 28% have more savings now.
- Millennials (ages 27-42):
- 31% have less savings.
- 25% have more savings.
- Gen X (ages 43-58):
- 35% have less savings.
- 14% have more savings.
- Boomers (ages 59-77):
- 34% have less savings.
- 17% have more savings.
Income disparities:
- Households earning under $50,000 annually:
- 71% feel behind on savings.
- Only 11% feel ahead.
- 36% have less savings now than at the start of 2024.
- 25% have no emergency savings at all.
- Households earning $100,000 or more:
- 44% feel behind.
- 26% feel ahead.
- 26% have less savings now; 33% have more.
- Only 4% have no emergency savings.
Key obstacles to saving:
- Among those who haven’t increased their emergency savings in 2024:
- 53% cite rising prices/inflation.
- 43% mention having too many expenses.
- 24% point to too much debt.
- 14% are comfortable with their current level of savings.
- Other factors include changes in income/employment (18%), big emergency expenses (15%), and high interest rates (13%).
What they’re saying:
“Expenses, and the fact that those expenses have increased, have been a headwind to boosting emergency savings this year,” said Greg McBride, CFA, Chief Financial Analyst for Bankrate.
Between the lines: Inflation and increased living costs are affecting Americans across all generations and income levels, but lower-income households are feeling the pinch more acutely.
- Younger generations are more likely to feel on track with savings but still report significant challenges.
- Older generations are more likely to feel behind, potentially impacting their retirement plans.
