A recent survey revealed a startling truth about the finances of many Americans: over half of them don’t have enough money saved to cover their expenses in the event of an emergency.
The survey, which asked 1,000 adults about their savings habits and financial situations, showed that 22% of them had at least enough money put away to keep them comfortable for six months. Fifteen percent have funds to cover three to five months without income, and 21% have emergency savings that will last for less than three months. Twenty-nine percent have no emergency funds put away at all. That’s up from 26% just one year ago.
Young people more likely to have savings
One surprising finding of the survey: people under the age of 30 were most likely to have substantial savings—at least five months of expenses—than any other age group. And that age group was also the least likely to have zero emergency savings set aside.
In better news, job security was up, net worth was also up, and people’s overall financial situations, along with their level of comfort with their amount of debt, also showed improvement. Savings was the one sore point in the survey, with 24% of those surveyed saying their savings had shrunk over the past year. In the 2014 survey, 21% said their savings had deteriorated in the last year.
Looking at gender differences, women felt more financially secure than men. They reported higher levels of confidence in job security and greater comfort with the amount of money they had in savings.
Savings tips from financial advisors
To help people put away funds for an emergency, financial professionals recommend setting up automatic payments to a savings account that’s linked to your main checking account. This way, a set amount is deducted each month, or each week, and put directly into savings.
If your paycheck is direct-deposited into your checking account, putting a set percentage of it into savings right away will also help build up a savings cushion. Even putting 5% aside each pay period will add up quickly.
The survey was conducted by phone in both English and Spanish between June 4 and 7, 2015. Five hundred people were polled by cell phone, and 500 were called on their landlines. The margin of error was plus or minus 3.7 percentage points.