(KTLA) — A $1,000 unexpected emergency expense could derail the lives of more than half of all Americans, according to a new survey.
The survey was conducted by Bankrate, a financial analysis and comparison site.
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. Most (21%) said they would use a credit card, 10% would borrow from loved ones and 4% would take out a personal loan. Only 16% said they would reduce their spending to address an unexpected emergency expense, Bankrate said.
Mark Hamrick, senior economic analyst for the site, said many Americans continue to “walk on thin ice” when it comes to emergency expenses.
Also discussed was the ever-present topic of inflation and rising prices.
Nearly two-thirds (63%) of Americans said inflation was causing them to save less for emergencies. On the flipside, however, 19% said they were actually saving more for emergencies specifically because of rising interest rates which are friendly to those putting extra away into their savings accounts.
“Inflation has been a key culprit standing in the way of further progress on the savings front,” Hamrick said. “Fortunately, rising interest rates have also provided more generous returns on savings.”
And if inflation or an unexpected emergency isn’t scary enough, the prospect of losing one’s job is also causing stress for many Americans.
If they were to suddenly lose their jobs, two-thirds of those surveyed said they would be worried about how they would be able to cover immediate living expenses for just the next month. Within that figure, 42% said they were “very worried.”
Hamrick said that, despite these fears and stressors, there is room for optimism.
“We indeed dodged the proverbial bullet as an often-predicted recession did not materialize during the last couple of years,” he said. “The still robust job market continues to provide the foundation for the opportunity to save, bolstered by some of the best returns on savings in years. Now is the time to prepare for the unexpected by prioritizing emergency savings.”
Bankrate said the nationwide survey was conducted using a mixture of online and phone responses with more than 1,000 adults interviewed.
For more on the findings and methodology, click here.
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FAQs
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.
What percent of Americans can't afford a $1000 emergency? ›
56% of Americans can't afford a $1,000 emergency expense: We are 'living in a paycheck-to-paycheck nation,' money expert says. A majority of Americans say they can't afford a $1,000 emergency expense, a recent report from Bankrate finds.
Is a $1000 emergency fund enough? ›
So, how much should you have in your emergency fund, anyway? Here's the deal: If you have debt (any kind of debt other than a mortgage) a $1,000 emergency fund is all you need.
Do 45% of Americans have less than $1000 saved for an emergency? ›
— Saving money is crucial - but how we spend that money is becoming a problem according to a study by Bankrate. According to the newest survey, only 44% of U.S. adults say they would pay an emergency expense of $1,000 or more from their savings. That means the money is likely coming from credit cards.
Is the emergency fund real? ›
An emergency fund is a bank account with money set aside to pay for large, unexpected expenses, such as: Unforeseen medical expenses. Home-appliance repair or replacement. Major car fixes.
Can Americans afford a 500 dollar emergency? ›
A majority of American workers can't afford a $500 emergency expense. 76% of employees don't have enough savings to cover one month of their expenses. Over one-third of employees earning $100,000 or more live paycheck to paycheck.
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-$2,000 | 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% |
4 more rowsMar 27, 2023
Recent MarketWatch Guides survey results indicate that 66.2% of Americans feel like they're living paycheck to paycheck. Respondents struggling to make ends meet span demographics, including genders, generations and incomes.
What is the 50 30 20 rule? ›
The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
How many Americans have no debt? ›
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
As Americans continue bearing the brunt of a higher-than-normal inflation rate and higher costs, saving money could prove to be more challenging than it was just a few years ago.
What is the average retirement savings by age? ›
Everyone in their '50s right now is a Baby Boomer. Baby Boomers have a median of $289,000 saved for retirement. Investors aged 55 to 64 have an average of $537,560 saved for retirement. Investors aged 65 to 74 have an average of $609,230 saved for retirement.
What percentage of Americans have 100k in savings? ›
About 26% of U.S. households had more than $100,000 in savings in retirement accounts as of 2022, according to USAFacts, a nonprofit organization that analyzes data from the Federal Reserve and other government agencies.
How many Americans have $1,000 emergency fund? ›
Only 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings, as of December 2023 polling.
What is the golden rule of emergency fund? ›
How much should you have in your emergency fund? The golden rule is to squirrel away at least three to six months of your basic living expenses for an emergency. That way, should a major life-shifting event set you back financially, such as a job loss, you'll have enough to cover your bills.
How much cash to keep at home? ›
In addition to keeping funds in a bank account, you should also keep between $100 and $300 cash in your wallet and about $1,000 in a safe at home for unexpected expenses. Everything starts with your budget. If you don't budget correctly, you don't know how much you need to keep in your bank account.
What percentage of US citizens Cannot afford healthcare? ›
WASHINGTON, D.C. — Mar. 31, 2022 — An estimated 112 million (44%) American adults are struggling to pay for healthcare, and more than double that number (93%) feel that what they do pay is not worth the cost.
What percentage of Americans are debt free? ›
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
How much does the average person spend on emergency funds? ›
We have this statistic according to the Bureau of Labor Statistics which says the average American is spending $45,756 a year to live, after taxes. $45,756 a year equals $3,813 a month in spending on average. Therefore, the average emergency fund size in America of $8,863 equals 2.3 months of expenses.
