June 23–Nearly a third of Americans have no emergency savings, a five-year high, according to a report released Tuesday.
A Bankrate.com survey showed 29 percent of Americans have no fund for unexpected expenses like car or home repairs. And relatively few, just 22 percent, have enough savings to cover the recommended six months of expenses, a typical financial adviser suggestion aimed at easing the period after a job loss.
Financial experts consider a cash cushion fundamental to personal financial planning — to not only provide peace of mind but to avoid pricey borrowing, like charging emergency expenses to high-rate credit cards. They often suggest saving small amounts regularly, like automatic deposits into a bank account, and using windfalls, like a tax refund, to boost a cash cushion.
“These results are further evidence that Americans remain woefully under-saved for unplanned expenses and rather than progressing are moving in the wrong direction,” said Greg McBride, chief financial analyst at Bankrate.com.
Maybe surprisingly, adults under 30 are more likely than any other age group to have savings that would cover up to five months of expenses.
The report also found that 21 percent have some emergency savings, but not enough to cover three months of expenses, the lowest since 2012. Also, 15 percent have enough to cover between three and five months of expenses, the lowest seen in five years of questioning.
The survey included phone interviews in English and Spanish with 1,000 adults from June 4 to 7.
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