A majority of households say they feel behind on saving for emergencies — with only 19% of families reporting that they increased their emergency savings balances since the beginning of the year, according to a new report from Bankrate.
Higher interest rates and inflation took a toll on American's saving accounts this year. Greg McBride, Bankrate’s chief financial analyst said, “Rising prices and high household expenses have been the predominant impediments to boosting emergency savings."
When it comes to age, older generations are more likely than younger ones to have less emergency savings now than compared to the start of 2023. About 21% of Gen-Zers responded saying they have less emergency savings. That's compared to 39% of Gen Xers who said they have less emergency savings now compared to the beginning the year.
The likelihood of having no emergency savings either now or at the beginning of 2023 decreases as household income increases, according to Bankrate data.
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The top reason Americans haven’t increased their savings this year is inflation, cited by 57% of all households, followed by 38% of people saying they have too many expenses.
“Cutting household expenses in a meaningful way may not be feasible with the run-up in prices for mainstay items such as shelter, food, and energy over the past couple of years,” said McBride.
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This data was collected by surveying roughly 2,500 adults in September regarding their level of emergency savings.
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