Americans rang in the new year under much better economic circumstances than experts expected, thanks to falling inflation and strong employment figures. But despite the surprisingly strong economy, many Americans still don’t have enough savings for a rainy day.

Only 44 percent of U.S. adults say they would pay an emergency expense of $1,000 or more from their savings, according to a new Bankrate survey. That’s up from 2023, when 43 percent of people said the same, and unchanged compared to 2022. Without savings to fall back on, 35 percent of people say they would borrow to pay a $1,000 unexpected expense, either by financing with a credit card and paying it off over time, taking a personal loan or turning to friends or family.

This data comes from Bankrate’s yearly emergency savings report, an exclusive survey done by Bankrate and polling partner SSRS. Since 2014, the survey has annually polled 1,000+ U.S. adults about their level of emergency savings. The most recent data, polled in December 2023, also examines the economic factors that Americans say are affecting their ability to save, and how worried they feel about their emergency savings if they were to lose their primary source of income.

We dodged the proverbial bullet as an often-predicted recession did not yet materialize during the last couple of years. Now is the time to prepare for the unexpected by prioritizing emergency savings. — Mark Hamrick | Bankrate Senior Economic Analyst

Key statistics on emergency funds and personal savings

Savings
  • Many would borrow in an emergency. Only 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings. 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.
  • Inflation is a common culprit that’s affecting savings. 63% of U.S. adults say inflation is causing them to save less for unexpected expenses, while 45% say the same of rising interest rates. However, 19% of people say rising interest rates are causing them to save more for unexpected expenses.
  • Low savings could be concerning. If they were to lose their primary source of household income tomorrow, 66% of U.S. adults would be worried that they wouldn’t have enough emergency savings to cover a month’s living expenses.
  • Discomfort with savings is high. 57% of U.S. adults are uncomfortable with the amount of emergency savings they currently have, as of May 2023 polling.
  • Fewer have no emergency savings. 22% of U.S. adults have no emergency savings at all, the second lowest percentage in 13 years of polling, as of May 2023 polling.

More than half of Americans wouldn’t pay for a sudden $1,000 bill from their emergency savings

The majority (56 percent) of U.S. adults wouldn’t pay for an emergency expense of $1,000 or more, such as an emergency room visit or unexpected car repair, from their savings account. The percentage of people who would pay from their savings has barely changed over the past three years:

  • 2024: 44 percent
  • 2023: 43 percent
  • 2022: 44 percent

“All too many Americans continue to walk on thin ice, financially speaking, with fewer than half indicating they would pay an emergency expense of $1,000 or more from savings,” Bankrate Senior Economic Analyst Mark Hamrick says. “Inflation has been a key culprit standing in the way of further progress on the savings front. Fortunately, rising interest rates have also provided more generous returns on savings.”

If they don’t pull the funds from savings, the second-most common option (21 percent) would be to finance the expense from a credit card and pay it off over time. Others would reduce their spending on other things or take out a loan:

Source: Bankrate survey, December 15-17, 2023

“Interest rates charged on credit card debt, recently averaging nearly 21 percent, are the highest we’ve seen. Yet 21 percent of Americans would use a credit card and pay it off over time when facing a sudden, unforeseen expense,” Hamrick says. “That risks putting them even farther behind on their financial goals.”

  • Men, older Americans and higher-income or highly-educated households are all more likely to say they would pull from savings for an emergency $1,000 expense. Men are only slightly more likely than women to say they would use their savings:

    • Men: 47 percent
    • Women: 43 percent

    Baby boomers (ages 60-78) are far more likely to say they would use their savings for an emergency expense, compared to younger generations:

    • Gen Zers (ages 18-27): 31 percent
    • Millennials (ages 28-43): 43 percent
    • Gen Xers (ages 44-59): 36 percent
    • Baby boomers: 59 percent

    People with a college degree (or more) are more than twice as likely to say they would pay the costs from their savings than those with at most a high school diploma:

    • High school diploma or less: 29 percent
    • Some college education: 40 percent
    • College degree or more: 64 percent

    Far more households with a yearly income of $100,000 or more say they would pay for a $1,000 emergency bill with savings:

    • Less than $50,000 per year: 26 percent
    • $50,000-$74,999 per year: 41 percent
    • $75,000-$99,999 per year: 58 percent
    • $100,000 per year or more: 70 percent

Nearly 2 in 3 Americans say rising prices are causing them to save less as inflation’s impact lingers

The majority (63 percent) of Americans say high inflation is causing them to save less. They also commonly cited rising interest rates and changes in income or employment:

  • High inflation: 63 percent
  • Rising interest rates: 45 percent
  • Change in income or employment status: 41 percent
  • Anything else: 42 percent

Rising interest rates can make your monthly debt payments more expensive, but high interest rates aren’t always harmful — someone taking advantage of a savings account with interest could benefit from higher rates. Accordingly, 19 percent of people say rising interest rates are causing them save more for unexpected expenses:

Source: Bankrate survey, December 15-17, 2023

Though inflation has a major impact on saving habits, inflation is now far lower than it was in 2023. The percentage of people who say inflation caused them to save less is lower, too, from 68 percent in 2023 to 63 percent in 2024.

“Inflation’s once-in-a-generation surge has left its mark on American savings habits,” Hamrick says. “There is a glimmer of hope, however, with word that 19 percent of Americans cite rising interest rates as the reason they’ve saved more.”

  • Women are significantly more likely to say inflation is causing them to save less than men:

    • Men: 58 percent
    • Women: 67 percent

    Gen Xers were unlikely (at 36 percent) to say they would pay for a $1,000 emergency expense with savings. They’re also the generation most likely to say inflation is why they’re saving less:

    • Gen Zers: 57 percent
    • Millennials: 66 percent
    • Gen Xers: 69 percent
    • Baby boomers: 58 percent

    Households with an income of $100,000 per year or more were the least likely to say inflation is why they’re saving less:

    • Less than $50,000 per year: 67 percent
    • $50,000-$74,999 per year: 63 percent
    • $75,000-$99,999 per year: 65 percent
    • $100,000 per year or more: 55 percent

If they were to lose their job tomorrow, 2 in 3 Americans would be worried about having enough savings to cover a month’s living expenses

Not having enough savings for an emergency is weighing on people’s minds. If they were to lose their primary source of income tomorrow (such as their job), 66 percent of U.S. adults would be worried about having enough emergency savings to cover their immediate living expenses for the next month. That includes 42 percent of people who would be very worried:

Source: Bankrate survey, December 15-17, 2023

Only 34 percent of people would be either not too worried or not at all worried about covering their living expenses if they were to lose their immediate source of income.

Despite Americans’ concerns about the future, the U.S. defied expectations and did not experience a recession in 2023. A recession in 2024 is still possible, but now, high interest rates could be a good opportunity to increase your savings.

“It is true that we dodged the proverbial bullet as an often-predicted recession did not yet materialize during the last couple of years,” Hamrick says. “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.”

As of May 2023, more than 1 in 5 Americans have no emergency savings

Though more than half of Americans don’t have at least three months of emergency expenses saved, more people year-over-year had some degree of emergency savings in 2023, according to Bankrate. 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.

Source: Bankrate survey, May 19-22, 2023

Nearly one in four (22 percent) U.S. adults said they have no emergency savings. Despite economic challenges, the percentage remains relatively unchanged year-over-year. In 2022, 23 percent of Americans had no emergency savings.

Because building savings takes time, Bankrate Chief Financial Analyst Greg McBride recommends people automate contributing to their savings accounts as much as possible. “Successful saving is all about the habit. Regular contributions such as a direct deposit from your paycheck or an automatic monthly transfer into an online savings account lead to a higher level of emergency savings and greater comfort level with it,” McBride said.

Younger Americans, who are less likely to have built that habit, are more likely to have little to no emergency savings. Nearly one-third (31 percent) of Gen Zers do not have emergency savings — more than twice as many as the 15 percent of baby boomers who have no emergency savings. Baby boomers are also more than three times as likely to have enough savings to cover six months or more of expenses as Gen Zers (47 percent and 13 percent, respectively).

How much emergency savings someone has rises as they grow older and wealthier. The difference in emergency savings levels is particularly stark between different income brackets. Households with a yearly income under $50,000 a year are more than seven times more likely to have no emergency savings than households who make $100,000 a year or more:

Income bracket Percentage without emergency savings Percentage with enough savings for three months of expenses or more Percentage with enough savings for six months of expenses or more
Source: Bankrate survey, May 19-22, 2023
Under $50,000 a year 37% 28% 16%
$50,000-$74,999 18% 49% 29%
$75,000-$99,999 10% 61% 41%
$100,000 or more 5% 75% 50%

Geographically, Westerners (55 percent) and Midwesterners (52 percent) are most likely to have enough emergency savings to cover three months of expenses or more compared to Southerners (42 percent) and Northeasterners (47 percent).

Region Percentage without emergency savings Percentage with enough savings for three months of expenses or more
Source: Bankrate survey, May 19-22, 2023
West 19% 55%
Midwest 20% 52%
South 24% 42%
Northeast 26% 47%

More than half of Americans are uncomfortable with their level of emergency savings

More than half of U.S. adults (57 percent) feel uncomfortable about their current level of emergency savings, as of May 2023. That includes 33 percent who are “very uncomfortable” with their level of savings and 24 percent who were “somewhat uncomfortable.” Only 43 percent of Americans are comfortable with their current level of savings: 15 percent are “very comfortable” and 28 percent are “somewhat comfortable.”

Source: Bankrate survey, May 19-22, 2023

More than half (56 percent) of baby boomers are comfortable with their level of emergency savings, an 18 percent leap above Gen X, the generation with the second-highest comfort level. In comparison, 32 percent of Gen Zers and 37 percent of millennials are comfortable with their level of emergency savings.

Higher-income households are also more likely to feel more comfortable with their level of emergency savings. About two-thirds (67 percent) of households with an income under $75,000 a year are uncomfortable with their current level of emergency savings, compared to 41 percent of those who earn $75,000 or more a year.

The majority (84 percent) of those with at least six months’ worth of emergency savings are comfortable with their level of savings. Also, 92 percent of Americans who are “very comfortable” with their current level of emergency savings have enough to cover at least 3 months of expenses.

Those uncomfortable with their savings tend to have less than three months of expenses put aside:

  • 37 percent have no savings.
  • 41 percent have less than three months of expenses saved.
  • 22 percent have three months of expenses or more saved.

“It takes time to accumulate a sufficient emergency savings cushion, in large part because household expenses tend to increase until your peak earning years, making what constitutes an adequate cushion a moving target,” McBride said.

Nearly 2 in 3 Americans would need six months’ worth of emergency savings to feel comfortable

As of May 2023, two-thirds (64 percent) of U.S. adults say they would feel comfortable about their savings when they have enough to cover six months of expenses:

We asked: What’s the minimum amount of emergency savings you would need to feel comfortable?

No emergency savings 3%
Source: Bankrate survey, May 19-22, 2023
Some, but less than would cover 3 months’ expenses 9%
3 to 5 months’ expenses 25%
Enough to cover 6 months’ expenses or more 64%

In comparison, 25 percent would feel comfortable if they had enough savings to cover three to five months of expenses. Only 9 percent would be comfortable with having some but less than three months’ of expenses.

In a priority shift, 88 percent of people in 2023 say they wouldn’t be comfortable with their emergency savings until they have enough to cover at least three months of expenses, up from 72 percent in 2019.

Over half of employed Americans add to their emergency savings at least monthly

Like any habit, building a savings account takes time and consistency. As of May 2023, more than half of (56 percent) employed Americans contribute to their emergency savings accounts at least monthly: 29 percent contribute every paycheck, and 26 percent contribute once a month.

Source: Bankrate survey, May 19-22, 2023

Note: Employed Americans only

As for those who contribute to their savings account less frequently, 18 percent of workers contribute every couple of months, 8 percent of workers contribute once a year and 6 percent contribute less than once a year. Over one in 10 (13 percent) never add to their emergency savings.

Just as they are more likely to have more funds in their emergency savings, higher income workers are more likely to contribute to their savings more frequently. Half (50 percent) of workers who make less than $75,000 a year add to their emergency savings at least monthly, compared to 63 percent of workers who make more than $75,000 a year.

While Northeasterners were the most likely in Bankrate’s poll to have no emergency savings, they’re contributing frequently. Just under two in five (38 percent) Northeasterners add to their emergency savings every paycheck, the most of any region, more than the 31 percent of Midwesterners, 29 percent of Southerners and 23 percent of Westerners.

As of January 2023, over 1 in 3 Americans have more credit card debt than emergency savings — highest on record since 2011 polling

Source: Bankrate survey, January 20-23, 2023

Over a third (36 percent) of people have more credit card debt than emergency savings, the highest percentage in 12 years of Bankrate asking this survey question. In comparison, 22 percent of people had more credit card debt in January 2022, while 28 percent of people had more credit card debt in January 2020, before COVID-19 began to affect the U.S.

The majority (51 percent) of U.S. adults still say the amount in their emergency fund or savings account is higher than their credit card debt. The smallest percentage of people (13 percent) said they have no credit card debt and no savings.

“It is quite stunning that such a high percentage of adults has no savings and no credit card debt,” Bankrate Senior Economic Analyst Mark Hamrick said. “Anyone with no such savings, including those without access to credit, risks tremendous stress, or worse, on their personal finances when hit with a significant unplanned expense such as a major home or auto repair.”

Competing priorities: building emergency savings vs. paying down debt

Source: Bankrate survey, January 20-23, 2023

In periods of economic uncertainty, it’s a good idea to try to pay down debt quickly and build up your emergency savings in case of a loss of income. It’s not always possible to do both at once, but Bankrate found in January 2023 that a little more than a third (34 percent) of people are prioritizing both paying down debt and focusing on increasing emergency savings.

“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 said. “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.”

3 tips on building your emergency fund amidst high inflation

Building an emergency fund can be a lifeline if your income decreases or you lose your job. Here are three tips on how to start and maintain an emergency fund to prepare for uncertainty.

1. Figure out how much you need in emergency savings

Experts commonly recommend saving three to six months of expenses in case of emergencies. For example, if your monthly bills total $2,000 a month, saving $6,000 will allow you to pay your bills for a short time if you lose your main source of income. This is not a concrete rule; you may need to save more if you are self-employed and anticipate a lean month, or if you are preparing for economic hardship, such as a hiring slowdown or a recession.

2. Open a savings account just for emergencies

Different emergency funds allow you to protect your savings and allow you quick access when you need the money. An online savings account, money market account, money market mutual fund or a separate savings account with your existing bank or credit union can allow you to save emergency funds for the future.

3. Make a budget around savings

You may already have a budget in place to make room for saving more, but make sure you stick to your good habits. Rebuilding your savings, or starting to save for the first time, can be easier by automatically transferring money to your savings each month or taking on side hustles for more income.

  • The study (that was conducted December 2023) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from December 15 – December 17, 2023, among a sample of 1036 respondents. The survey was conducted via web (n=1006) and telephone (n=30) and administered in English (n=1010) and Spanish (n=26). The margin of error for total respondents is +/-3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.

    The study (that was conducted in May 2023) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from May 19 – May 22, 2023 among a sample of 1025 respondents. The survey was conducted via web (n=995) and telephone (n=30) and administered in English (n=1000) and Spanish (n=25). The margin of error for total respondents is +/- 3.4 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.

    The study (that was conducted in January 2023) was conducted for Bankrate by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Interviews were conducted from January 20-23, 2023 among a sample of 1,032 respondents in English (1,007) and Spanish (25). This survey was conducted via web (1002) and telephone (30), while surveys prior to 2023 were conducted entirely via telephone. The margin of error for total respondents is +/-3.7 percentage points at the 95% confidence level. All SSRS Omnibus data are weighted to represent the target population.