Most American adults don't have enough savings to pay an emergency $1,000 expense (2024)

While nobody really wants to tap into their emergency savings, most Americans couldn’t even afford to do so if they had to.

A stunning new Bankrate survey of 1,030 individuals finds that more than half of American adults (56%) lack sufficient savings to shoulder an unexpected $1,000 expense. Of that number, 21% said they would go into debt by financing the spending with a credit card, while 16% would steeply cut back on other spending to bridge the gap. Another 10% would borrow from family and friends, 4% would take out a personal loan, and 5% said they would do “something else.”

Bankrate senior economic analyst Mark Hamrick tells Fortune that this survey is “disappointing because it is an indication that so many Americans are living paycheck to paycheck.” He said this is sadly consistent with earlier Bankrate research that found individuals’ two major financial regrets are the failure to save for emergencies and the failure to save for retirement.

Without requisite savings, 35% of respondents said they’d borrow the money, either from friends and family, a personal loan, or putting it on a credit card. The findings show an unsurprising generational gap, with about three out of five baby boomers saying they’d pay an emergency expense from their savings, while fewer than one-third of Gen Zers would do the same.

“It is understandable, to some degree, that those who are more established in their lives and personal finances might have that capability,” Hamrick says. “It also might reflect that more senior individuals have had sufficient experience with their finances that they understand that savings needs to be a priority.”

The reason most respondents cited for their lack of parachute? Inflation—followed close behind by rising interest rates and a recent change in employment status—is dissuading them from putting money aside. “Inflation’s once-in-a-generation surge has left its mark on American savings habits,” Hamrick wrote in the report. “There is a glimmer of hope, however; 19% of Americans cite rising interest rates as the reason they’ve saved more.”

People tend to save more when they expect a prolonged economic downturn. That’s “the ‘precautionary’ motive for saving,” economist Guillaume Vandenbroucke wrote for the St. Louis Fed in 2021. “If the downturn is not expected to last, people are likely to use their savings to maintain their consumption; that is, they will keep paying their rent, mortgage, and utility bills.”

But despite the larger pressures, they’re not satisfied with their situation; 57% of respondents said the current state of their savings is stressing them out. Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That’s especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.

Even in economically uncertain times, paying down debt quickly—and contributing to emergency funds—must be a top priority, Bankrate advises, lest a loss of income throw a wrench in your plans. And it’s possible to multitask; just over a third of the study’s respondents said they’re currently prioritizing paying down debt and saving money in equal measure.

“For those wisely focused on managing and building their emergency savings, this is an opportune time to benefit from the increase in interest rates,” Hamrick wrote. “Emergency savings, by definition, need to be liquid or easily accessible. A high-yield savings account dedicated to this purpose amounts to a self-insurance policy guarding against unplanned expenses.”

The takeaway, Hamrick adds to Fortune, is that people at all life stages—and at all incomes—recognize the importance of avoiding “the pitfalls of insufficient savings.”

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Most American adults don't have enough savings to pay an emergency $1,000 expense (2024)

FAQs

Most American adults don't have enough savings to pay an emergency $1,000 expense? ›

Only 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings, as of December 2023 polling. 35% would borrow money, including 21% who would finance with a credit card and pay it off over time, 10% who would borrow from family or friends and 4% who would take out a personal loan.

What percentage of Americans can cover a $1000 emergency? ›

Fewer than half of Americans, 44%, say they can afford to pay a $1,000 emergency expense from their savings, according to Bankrate's survey of more than 1,000 respondents conducted in December. That is up from 43% in 2023, yet level when compared to 2022.

Is a $1,000 emergency fund enough? ›

Starter emergency fund: If you have consumer debt, you need a starter emergency fund of $1,000. This might not seem like a lot, but it's just a temporary buffer while you pay off that debt. Fully funded emergency fund: Once that debt's gone, you need a fully funded emergency fund of 3–6 months of expenses.

What of Americans have less than $1000 saved for an emergency fund? ›

A stunning new Bankrate survey of 1,030 individuals finds that more than half of American adults (56%) lack sufficient savings to shoulder an unexpected $1,000 expense.

What percent of Americans don't have 1k? ›

Bankrate's latest survey results found 56% of U.S. adults lack the emergency funds to handle a $1,000 unexpected expense and one-third (35%) said they would have to borrow the money somehow to pay for it.

Do 45% of Americans have less than $1000 saved for an emergency? ›

But only 44% of Americans are prepared for a $1,000 emergency expense, according to a survey from financial analysis site Bankrate. While a percentage point higher than last year, most people still say they would be derailed by such a crisis.

How can I get a $1000 emergency fund? ›

Every pay period, ask your employer to deduct $100 from your paycheck and transfer it to a savings account. Ask your HR representative for more details and to set this up. 2. Ask your bank or credit union to transfer $100 from your checking account to a savings account every month.

How many Americans are broke? ›

Key Findings. 48.6% of Americans consider themselves to be “broke,” and 66.2% feel they are “living paycheck to paycheck.” There is a gender gap in the results: Females are more likely to consider themselves “broke” at 55.8%, compared to males at 41.1%.

Can $1,000 last a month? ›

The harsh truth is that $1,000 per month is very hard to live on, even if you lower your costs to the bare minimum. With inflation causing the prices of goods and services to increase every year, $1,000 a month will become harder and harder to live on going forward.

How many Americans don't budget? ›

27% of Americans Don't Think They Need a Budget

Almost 30% of Americans don't budget because they simply don't think they need this tool. Men are slightly more likely than women to say they don't need a budget, but women are almost 4% more likely than men to say they won't stick to a budget.

What are the top 3 careers reported among millionaires? ›

Engineer 2. Accountant (CPA) 3. Teacher 4. Management 5.

What is the 50 30 20 rule? ›

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

How much emergency money does the average person have? ›

Six in 10 respondents say $2,500 or more, including 21% who say $10,000 or more. (Among those making $100,000 or more, 44% say they'd need $10,000 or more saved to feel comfortable — more than double the overall average.) Just 15% overall say less than $1,000.

How many Americans can afford a $1,000 expense? ›

Only 44% of Americans can afford a $1,000 emergency expense, says Bankrate.

How rich is 1% in USA? ›

You need more money than ever to enter the ranks of the top 1% of the richest Americans. To join the club of the wealthiest citizens in the U.S., you'll need at least $5.8 million, up about 15% up from $5.1 million one year ago, according to global real estate company Knight Frank's 2024 Wealth Report.

How many Americans have more than $1000? ›

Personal Savings in the U.S.

18 percent said their saving were at least $1000 but under $10,000, while 11 percent each had $10,000 to $49,999 and $50,000 or more saved up.

How many people have $10,000 in savings? ›

Majority of Americans Have Less Than $1K in Their Savings Now
How Much Do Americans Have in Their Savings Accounts?
$1,001-$2,00010.60%9.81%
$2,001-$5,00010.60%10.64%
$5,001-$10,0009.20%9.51%
$10,000+12.60%13.48%
4 more rows
Mar 27, 2023

How much money should a person have in an emergency fund? ›

An emergency fund can serve as your personal safety net during periods of financial stress. While you're working, we recommend you set aside at least $1,000 for emergencies to start and then build up to an amount that can cover three to six months of expenses.

How much money should someone have for emergency? ›

As a general rule of thumb, most financial experts recommend keeping three to six months' worth of essential expenses in an emergency fund. For example, if your monthly expenses are $3,000, your eventual goal would be to keep between $9,000 and $18,000 in an emergency fund.

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