According to Bankrate’s latest Annual Emergency Savings Report, a majority of Americans polled said they couldn’t afford to pay emergency expenses or cover their living expenses for just one month if they lost their primary source of income. The main reason cited is record-high inflation.
The survey found that 68% of those surveyed said they’re “worried they wouldn’t be able to cover their living expenses for just one month if they lost their primary source of income.” Additionally, nearly half of those surveyed, 49%, said they have less savings (39%) or no savings (10%) compared to a year ago.
Bankrate senior economic analyst Mark Hamrick said, “It’s clear that the less-than-optimal economy, including historically high inflation coupled with rising interest rates, has taken a double-edged toll on Americans. Many have resorted to tapping their emergency savings if they have it, or have taken on credit card debt, or some combination.”
When broken down by age group, 85% of Generation Z (ages 18-26) and 79% of Millennials (ages 27-42) said they were more worried about being unable to cover emergency expenses than other age groups.
In addition to not being able to save, Americans are going into debt to make ends meet. The report found that 36% said they have more credit card debt than emergency savings – the highest on record since 2011. One-quarter said they would go into credit card debt to pay a $1,000 emergency expense and pay it off over time—the highest percentage claiming to do so since polling started in 2014.
Bankrate notes that 51% surveyed said they have more emergency savings than credit card debt. However, 13% said they have no credit card debt and no savings, which Hamrick says is a high percentage.
The report, released late last month, includes findings from two surveys conducted between Dec. 16-19, 2022, among 1,028 respondents, and between January 20-23, 2023, among 1,032 respondents. They were conducted in English and Spanish and over the Internet and by phone. The margin of error is 3.5 +/- for the December survey and 3.7 +/- for the January survey. Data was also weighted to represent the target population, the report states.
With the Federal Reserve Bank having raised interest rates seven times in 2022 to combat rising inflation, and with prices still on the rise, the survey results paint a picture of financial stress for many Americans.
