Survey: More Than One-Quarter of Americans Have No Emergency Savings

Americans are saving far less now than a few decades ago.

(iStockPhoto)

Financial experts advise people to have three to six months' worth of expenses saved up.

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A sizable share of Americans is just one unexpected bill away from being broke.

Fully 27 percent of Americans say they have no emergency savings, and only half claim they have enough saved up to cover three months' worth of expenses, according to new survey data from Bankrate.com. Only 24 percent of Americans say they have at least six months' worth.

That lack of savings persists across all income groups.

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"When we look at the propensity or lack thereof to have emergency savings, it is clear across all income groups that everybody's got work to do," says Greg McBride, senior financial analyst at Bankrate.

While higher-income households are more likely to have saved up money than those on the lower end of the spectrum, even many of these upper-income households have failed to stow away much emergency cash. According to McBride, only half of households with annual incomes of $75,000 or more have saved up enough money to cover six months of expenses, the level that Bankrate considers sufficient.

Many financial experts advise people to have three to six months' worth of expenses saved up. While six months is on the upper end of that range, McBride says that a slow-growing job market and persistent long-term unemployment are good reasons for people to save more.

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"All of that argues for more of a cushion, not less of a cushion," he says.

According to figures from the Commerce Department, Americans' propensity to save has declined considerably in the last 40 years. In the first quarter of 2013, Americans' personal saving rate — that is, the share of all Americans' income not consumed — was at 2.3 percent, a five-year low and down from the 2012 fourth-quarter estimate of 5.3 percent. In the 1970s and early 1980s, the savings rate often trended above 10 percent.

(Federal Reserve Bank of St. Louis)

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That 2.3 percent figure is, however, subject to revision, and the personal saving rate has been known to undergo large revisions, as the Cleveland Fed noted earlier this month. Still, the data show that Americans are saving less than they used to. McBride says that may have to do with a materialist culture and "keeping up with the Joneses." However, rising costs of living combined with stagnant wages likely also play a part, he says.

"It's not that [consumers] are being frivolous or careless," he says. "In a lot of cases, it's simply because their income hasn't gone up, and other expenses have."

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