Americans with No Emergency Funds: Progress & Challenges

Editor: Vlad Rothstein | Tactical Investor

Progress and Challenges: Americans with No Emergency Funds

Updated May 2023

Let’s start with a trending topic before we get into millennials’ lack of emergency funds.

Whenever experts state that something is dead, hated or disliked, one has to start viewing that sector more favourably. Value stocks are likely to start trending upward shortly. We suspect one more wave of pain might be necessary to drive the last holdouts out of this sector. When the masses state something is dead, the opposite is usually true. One should buy when the masses are panicking and run when they are Euphoric. Is Value Investing Dead?

Financial Struggles Continue for Millennials: Emergency Funds Remain Elusive

A recent Bankrate survey reveals that economic uncertainties, including inflation, have significantly impacted Americans’ financial preparedness. The study indicates that only 48 per cent of U.S. adults possess enough emergency savings to cover three months’ worth of expenses, and this percentage has remained stagnant since 2022. The report highlights the struggles millennials face, many of whom do not have sufficient funds for emergencies, leading to discomfort and anxiety about their financial situation. The survey also reveals that building emergency savings is a challenge for younger generations, particularly those with lower incomes.

Furthermore, a substantial portion of the population is burdened by credit card debt, making it challenging to prioritize savings amidst competing financial obligations. As economic factors continue to hinder saving efforts, most Americans find it difficult to allocate funds for emergencies, emphasizing the need for consistent and automated savings contributions. Despite the hurdles, there is a growing awareness of the importance of emergency savings, with more individuals taking small steps towards financial preparedness.

Emergency Funds: Encouraging Progress in American Savings Habits, Yet Challenges Persist

According to a recent survey conducted by US financial services company Bankrate, almost 25% of US adults admit to having no savings to rely on in case of emergencies like sudden job loss, costly medical visits, or other significant financial burdens.

Surprisingly, the New York-based institution views these survey results as positive news, as the percentage of people with zero savings has reached its lowest point since polling in 2011.

The survey, conducted in June, also highlights that 31% of Americans possess what Bankrate considers to be an adequate savings cushion. While this implies that about two-thirds of the country still falls short on saving enough money, the number of diligent savers has reached its highest level since the survey’s inception seven years ago, marking a 9% increase from 2015.

Overall, the saving habits of Americans are showing signs of improvement, although they are far from reaching the ideal level. Bankrate analyst Greg McBride stated that “Americans are putting money in savings,” expressing encouragement for progress. However, he also stressed the importance of striving to have at least six months’ expenses for unexpected events. Full Story