🖤 Donations of all sizes power our public service journalism Give Now

About a quarter of Americans have no emergency savings

Amanda Peacher Jul 21, 2021
Heard on:
HTML EMBED:
COPY
Around 25% of Americans report having no emergency savings, up from 21% in 2020, per a new Bankrate.com survey. Hugh Pinney via Getty Images

About a quarter of Americans have no emergency savings

Amanda Peacher Jul 21, 2021
Heard on:
Around 25% of Americans report having no emergency savings, up from 21% in 2020, per a new Bankrate.com survey. Hugh Pinney via Getty Images
HTML EMBED:
COPY

Americans were able to add almost $2 trillion to their savings accounts last year, according to the Kansas City Federal Reserve. But a new Bankrate.com survey released Wednesday shows that not all Americans could do that, especially low-income Americans.

Financial advisors often recommend saving enough to cover three to six months of expenses for emergencies. 

“That feels like the hugest intimidating number ever,” said Kera Waters, a single mom in California and who said she’s struggled to save.

Waters kept her job as a bilingual speech pathologist in the pandemic, but she lives in a high-cost area. Last month, she ran an overdraft on her bank account by a couple of hundred dollars. 

“And I had to use that to purchase our medications and like milk to get to the end of the month,” she said.

According to Bankrate’s survey, 25% of Americans have no emergency savings. 

That’s why the high savings rate during the pandemic does not tell a full story, said Greg McBride with Bankrate. 

“That has certainly not fallen evenly across all households,” he said.

Low-income households had a hard time saving. And savings are important beyond emergencies, because “it can also be thought of as an opportunity fund, anybody who’s looking to start a business,” McBride said.

That’s something that’s harder to do without some money put away. 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.