According to a new Bankrate.com report, 26% of Americans have no emergency savings fund. This is about one in four. Many consumers have taken the slight improvement in the economy as their cue to spend more and save less.
“Americans continue to show a stunning lack of progress in accumulating sufficient emergency savings,” says Greg McBride, Bankrate.com’s chief financial analyst. “Even among the highest-income households — those with annual income of $75,000 or above — fewer than half (46%) currently have a six-month savings cushion.”
Here are some of the survey findings:
- About 67% have saved less than the recommended six months’ worth of expenses and half have saved less than three months’ expenses.
- The percentage of Americans with at least three months’ expenses in savings declined from 45% last year to just 40% this year.
- Those between ages 30 and 49 are more likely than any other age group to have no emergency savings.
- Those in the 18 to 30 age range are the most likely to have up to five months’ expenses saved up.
McBride says that those under age 30 usually have lower expenses due to roommates, living with their parents or being students. Those who are 30 through 49 tend to spend more. During this time, expenses often rise faster than emergency savings.
Bankrate’s Financial Security Index rose to 101.5. the index shows that job security improved from a negative reading in May. Roughly 24% of survey takers feel more secure in their jobs than they did a year ago compared with 17% who don’t feel as secure.
Bankrate says savings has been weak every month since they began polling in December 2010.