Survey Finds Only 41% of Americans Could Pay $1000 Expense Using Savings

A recent Bankrate survey found that only 41 percent of Americans could use savings to pay for an emergency expense of $1000 or more, which is down from 44 percent last year. This number breaks up three years of progress since the lowest level at 39 percent in a survey published in January 2021, during the aftermath of the pandemic.

“We are essentially a paycheck-to-paycheck nation,” said Mark Hamrick, Bankrate Senior Economic Analyst. “Fewer Americans have the equivalent of a financial safety net to cover inevitable unexpected expenses, despite low unemployment and steady growth. This is one of the consequences of elevated prices stemming from inflation, the impacts of which are still being felt.”

43 percent of Americans said they would borrow money in some way to cover a $1000 emergency expense, including 25 percent who say they would use a credit card and pay it off over time, 13 percent who say they would borrow from friends or family, and 5 percent who say they would take out a personal loan. 

The survey found that older generations are more likely to cover a $1000 emergency with their savings: 59 percent of baby boomers and 42 percent of Gen Xers said they would utilize savings, compared to 32 percent of millennials and 28 percent of Gen Z.

Americans are saving less for several reasons, including inflation (68 percent of Americans), higher interest rates (47 percent), and a change in income or employment status (45 percent). 73 percent of Americans cite these reasons as to why they are saving less.

“We don’t know what the future of the economy might bring, but an increasing share of people are anxious about potential job loss or interruption in income,” Hamrick said. “By prioritizing saving, we can be better prepared for the unexpected and attain greater financial confidence and capability.”