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Balancing your savings and debt can be difficult, and more Americans are struggling to pull it off.

A new Bankrate survey of 1,004 adults finds that only 44 percent of households have more money in emergency savings than the amount they owe in credit card debt. That’s down from 58 percent last year and the lowest amount in Bankrate’s nine years of conducting the survey.

Results trend negatively from the other side as well: 29 percent of those surveyed reported having more credit card debt than emergency savings, which is an increase from last year’s 21 percent and the highest in nine years.

“The sharp deterioration in the relationship between credit card debt and emergency savings – with an increasing number of households having more credit card debt than emergency savings and a decline in those with more emergency savings than credit card debt – is an ominous indicator of the financial health among American households,” says Greg McBride, CFA, chief financial analyst at Bankrate.

How Americans are prioritizing their financial health

It doesn’t look like the decline in emergency savings will turn a corner anytime soon.

Many Americans don’t see building an emergency fund as a priority. Just 43 percent of those surveyed said they were focusing on boosting their emergency savings this year, down from 53 percent last year.

Meanwhile, another Bankrate survey found that only 40 percent of people could cover an emergency expense of $1,000 or more with savings, leaving the majority in an already precarious position.

The number of respondents who say they are prioritizing paying down debt was essentially unchanged year over year, from 40 percent in 2018 to 41 percent this year.

But those who say they are not focused on growing savings or paying off debt jumped from just 3 percent last year to 9 percent this year.

With lingering market uncertainty and forecasters predicting an economic slowdown, this decision can be detrimental. A savings cushion and smaller debt balance could make a big difference when facing the effects of an economic downturn, such as a job layoff.

Younger Americans have more difficulty finding balance

American households across all demographics saw deterioration in their emergency savings relative to their credit card debt year over year.

Older generations, though, are still more prepared:

  • Baby boomers are nearly twice as likely to have more savings than credit card debt (48 percent vs. 25 percent).
  • The silent generation is most likely to have savings outweigh credit card debt (45 percent vs. 20 percent).
  • The silent generation (41 percent), baby boomers (45 percent) and Generation X (49 percent) are all more focused on saving for emergencies than paying down debt

Millennials are most likely to hold more debt than savings (35 percent) and the only group more focused on paying down debt (52 percent).

Baby boomers and the silent generation are twice as likely to have more savings than credit card debt and, along with Generation X, are more focused on saving for emergencies than paying off credit card debt.

Millennials are the only generation prioritizing their credit card debt over building savings, but they also are the generation most likely to hold more debt than savings.

More people have no debt and no savings

A smaller trend emerged in this year’s survey: 18 percent of respondents have neither an emergency savings fund nor credit card debt. That’s an increase from last year’s 12 percent total and the highest in three years.

This may seem better than the alternative of higher debt than savings, but it’s also a dangerous position to be in.

People who have eliminated or avoided taking on any credit card debt should prioritize building their emergency savings so they have funds to fall back on in the case of job loss, natural disaster or any other kind of unexpected expense. Experts recommend keeping at least three to six months’ worth of expenses in an emergency fund.

If you’ve eliminated your high-interest debt, now is the perfect time to start.

“You never want to say, ‘I’ll do it tomorrow,’” says Glenn Brown, a financial planner and founder of PlanDynamic in Massachusetts. “You should be doing it today.”

Focus on building savings and paying down debt today

While you may choose to prioritize one over the other, what’s most important is that Americans take action and get a handle on reducing debt and increasing savings sooner rather than later.

“Consumers should make hay while the sun shines,” McBride says. “Now is the time – with unemployment low and wages rising – to right-size the equation by paying off high-cost credit card debt and adding to emergency savings. Sadly, it looks like we’re collectively moving in the wrong direction.”

As a first priority, stop adding to the amount of debt you already hold. The most dangerous consequence of credit card debt is the astronomical interest you can rack up by not paying it off each month. The average annual percentage rate on variable-rate credit cards is about 17.8 percent, according to Bankrate data.

Brown recommends looking at your expenses to find where you can cut back.

“Let’s look at the big four: shelter, transportation, food and social,” he says. “Those are your major four expenses.” Start looking for ways you can reduce these main expenses and you’ll be able to start paying off your debt rather than contributing to it.

Begin making a significant dent in your existing credit card debt by opening a balance transfer card with zero percent interest for an introductory period. You should consider cards with low or no transfer fees and an introductory period that works best with what you’re able to pay.

While you’re paying off high-interest debt, open a high-yield savings account or money market account and start earning interest on the funds that you’re able to save.

Most people won’t have three to six months’ expenses waiting to be added to savings, but you can start by contributing a small amount to your account monthly or every two weeks. Small, regular payments can quickly add up.

Once you’ve eliminated your credit card debt, use the money you were putting toward those payments to build your emergency savings more quickly. Automatically transfer your money into savings so you don’t have a chance to miss it before it’s gone.

Methodology

This study was conducted for Bankrate via telephone by SSRS on its Omnibus survey platform. The SSRS Omnibus is a national, weekly, dual-frame bilingual telephone survey. Interviews were conducted from Jan. 29–Feb. 3, 2019, among a sample of 1,004 respondents in English (968) and Spanish (36). Telephone interviews were conducted by landline (406) and cell phone (598, including 400 without a landline phone). The margin of error for total respondents is +/-3.73 percent at the 95 percent confidence level. All SSRS Omnibus data are weighted to represent the target population.