About 32% of Americans have no emergency savings, according to a recent survey, highlighting the financial pressure many households continue to face as elevated living costs, persistent inflation, and economic uncertainty make it difficult to build a financial safety net, Yahoo Finance reports.
The Empower survey findings come as many Americans continue to grapple with higher housing, grocery, insurance, and healthcare costs, leaving little room to save even as inflation has eased from its post-pandemic peak. Empower’s survey found that 39% of respondents identified rising prices as the biggest barrier to building emergency savings.
A separate Yahoo Finance-Marist poll painted a similarly concerning picture. The survey found that 35% of respondents said their savings would not last one month if they lost their primary source of income, underscoring how financially vulnerable many households remain.
The data also suggests that economic pressures, rather than irresponsible spending, are driving much of the nation’s savings shortfall. According to the poll, 47% of respondents cited the cost of living as the primary reason
they struggle to save. Another 11% pointed to unexpected expenses, while 10% blamed changes in income or employment. An additional 10% said existing financial obligations limited their ability to save, and just 8% identified overspending as the primary cause.Federal Reserve data shows the savings gap is especially pronounced among adults younger than 30 and people without a high school diploma, groups that generally report the lowest levels of emergency savings.
Without a financial cushion, many Americans rely on expensive forms of borrowing to cover
unexpected expenses. According to the Financial Industry Regulatory Authority, 27% of consumers use credit cards to pay for emergencies, while 12% turn to personal loans. Financial experts warn that relying on high-interest debt to cover short-term expenses can create long-term financial challenges and make it even harder to build savings.Some households also take on additional work or withdraw money from retirement accounts to cover emergencies. While those strategies may provide temporary relief, early withdrawals from retirement plans can trigger taxes and penalties while reducing long-term retirement savings.
Setting aside small amounts from every paycheck, directing future raises toward savings, using interest-bearing savings accounts, and temporarily reducing discretionary spending can help households gradually establish a financial cushion and reduce their reliance on debt when unexpected expenses arise.
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