Do Americans have adequate emergency funds?
Nearly one in four (22%) of U.S. adults have no emergency savings at all,
As of May 2023, more than 1 in 5 Americans have no emergency savings. Nearly one in three (30 percent) people in 2023 had some emergency savings, but not enough to cover three months of expenses. This is up from 27 percent of people in 2022.
Bankrate found that only 44% of Americans surveyed could afford a $1,000 emergency expense. That number is actually up one percentage point from the previous year, the company said. Those 56% of Americans who couldn't weather the storm said they would address that unexpected emergency charge in other ways.
Planning for the unexpected is crucial since life doesn't always go as planned. But only 44% of Americans are prepared for a $1,000 emergency expense, according to a survey from financial analysis site Bankrate.
How much money Americans have in their savings accounts—nearly half have less than $500. Nearly half of Americans have $500 or less in their savings accounts, an amount that leaves them vulnerable to unexpected expenses, according to a GOBankingRates survey of 1,063 U.S. adults conducted in November 2023.
Nearly half of Americans will start 2024 in the red
Of those who expect to have credit card debt, 74% expect to have $1,000 or more in debt, 42% expect to have $5,000 or more in debt and a quarter (25%) expect to have $10,000 or more in debt.
Generally, your emergency fund should have somewhere between 3 and 6 months of living expenses. That doesn't mean 3 to 6 months of your salary, but how much it would cost you to get by for that length of time.
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.
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.
Nearly one in four, or 22%, of respondents reported they have no emergency savings at all, a one percentage decrease from the 23% of Americans last year who also found themselves in the precarious position of having no emergency savings.
How many Americans are living paycheck to paycheck?
How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
Almost 40% of American adults report they struggle to make ends meet each month, an increase from 34.4% in 2022 and 26.7% in 2021.
49% of Americans Can't Afford a $1,000 Emergency, With Many Relying on Credit Cards for Unexpected Expenses. Matt has been covering the personal finance space for a decade, mostly focusing on credit cards. Dan Shepard is the managing editor for studies and surveys at LendingTree.
In its 2022 Survey of Consumer Finances, the Federal Reserve estimated that the average transaction account balance was $62,410, which included savings and checking accounts, money market accounts, call deposit accounts and prepaid debit cards. However, the median balance was much lower at $8,000.
Living paycheck to paycheck means you spend all your income on your monthly living expenses – like your rent or mortgage, utilities, groceries and transportation – and have little to no money left over.
Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.
According to the NBER's definition of recession—a significant decline in economic activity that is spread across the economy and that lasts more than a few months—we were not in a recession in 2022 and we still aren't now.
That could, in turn, lead to an uptick in spending, which would make a recession less likely. A December survey from the National Association for Business Economics also found that 76% of economists believe the odds of a 2024 recession are 50% or less.
That said, the typical age of financial independence should be between 20-23 years old, according to a Bankrate survey. Break the numbers down by cost category, and differences of opinion can be pretty wide.
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
How many Americans have a savings?
| Savings account balance | Percentage of respondents |
|---|---|
| $0 | 11% |
| $1 to $500 | 30% |
| $500 to $1,000 | 8% |
| $1,001 to $5,000 | 22% |
American households, on average, had $41,600 in savings, based on figures from the Federal Reserve in 2019. In 2022, that amount rose to about $62,500–which not only includes savings, but also assets from checking, money market accounts prepaid debit cards and more.
Millionaires Don't Keep Much in Their Traditional Savings Accounts. “My millionaire clients keep very little of their net worth in a traditional savings account. $10,000 or less,” said Herman (Tommy) Thompson, Jr., CFP, ChSNC, ChFC, a certified financial planner with Innovative Financial Group.
Other answers revealed that 15 percent had between $1,000 to $5,000, 10 percent with savings of $5,000 to $10,000, 13 percent boasted $10,000 to $20,000 of cash in their bank accounts while 20 percent had more than $20,000.
| How Much Do Americans Have in Their Savings Accounts? | ||
|---|---|---|
| $1,001-$2,000 | 10.60% | 9.81% |
| $2,001-$5,000 | 10.60% | 10.64% |
| $5,001-$10,000 | 9.20% | 9.51% |
| $10,000+ | 12.60% | 13.48% |
