Some 37% of Americans can’t afford an unexpected expense over $400, and almost a quarter (21%) have no emergency savings at all, according to new Empower research.
“Not all surprises are good, and people know it. The study suggests financial precarity at a time when household finances may be stretched due to rising prices and inflation,” says Rebecca Rickert, head of communications at Empower. “Life happens, and people are stressed about the surprise expenses that could tip them off-balance.”
In fact, 1 in 4 (25%) people dipped into emergency savings to cover basic living expenses in the past year. The median emergency savings for Americans is $600; men have double the stores compared to women – with a median of $1,000 versus $500.
For 62%, having a dedicated emergency savings is a priority, yet nearly half (47%) of people say regular monthly expenses are too high for them to put money away.
Americans agree that being able to weather unexpected financial needs creates a sense of Financial Happiness, and many are taking steps to plan for the unplanned.
Despite economic hardships, nearly half (43%) of Americans (and 51% of Baby Boomers) have contributed to their rainy-day fund within the past year – though just 14% contribute regularly.
There may be a silver lining: 34% believe they could handle any emergency expenses that arise.
More key findings:
- Ready or not: Over half (54%) report stressing about paying if and when disaster strikes, with Millennials (60%) worrying the most.
- Feeling the squeeze: Rising prices (57%) are keeping Americans from building up their emergency funds.
- Emergencies of all sizes: Roughly 1 in 5 have had to dip into their funds for car expenses (21%), home repairs (21%), and medical expenses (19%), debt payments (17%), and job loss (10%).
- Debt dilemma: Paying down debt is a higher priority than saving for an emergency for 57% of Americans.
- Cash stash: 30% of adults keep their emergency nest egg in cash and many are using a high-yield savings account to help their money grow (33%).
Visit The Currency™ to read Empower’s full research report, “In Case of Emergency.”
