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How Does Your Emergency Fund Compare? New Stats Reveal Americans’ Rainy Day Savings Habits

We often hear about the one in four Americans who have no emergency savings whatsoever, but that shouldn’t be an excuse not to start an emergency fund yourself. New research reveals which Americans are most prepared for a financial emergency: How are you doing?

bookshelf money jarIf you’re used to walking around without any money in your wallet, then maybe the college habit of surviving on ramen noodles made a big impact on you. Either that, or you’re so adept at using banking apps and debit cards that you really don’t see the need for carrying more than $20 on you.

But when it comes to emergency savings, that’s another story, at least for some. Ask any young adult whether it’s a good idea to have such a stash on hand, and you’ll hear an overwhelming number of “yes” votes. But not everyone’s ready for a potential financial calamity, according to a new report by

The report, based on telephone interviews with more than 1,000 adults, reveals that just 23 percent of Americans have emergency savings to cover six months of expenses.

Worse, 26 percent of all Americans have no emergency savings whatsoever.

There’s some good news for the Money Under 30 contingent, though: 18-30 year-olds are the most likely to have up to five months worth of expenses saved.

“That’s one of the bright spots in the survey,” says Greg McBride,’s chief financial analyst. “It’s probably a function of low expenses: they live at home, or have roommates or lower expenses.”

The results broke down this way: 32 percent had some emergency savings, but less than would cover three months’ expenses. And an additional 22 percent had three to five months’ expenses.

And it’s not exactly the Ramen Noodle Effect at work, either. “Give them credit where credit is due,” McBride says. “They’ve had a front row seat to the recession, and they’ve managed to learn something from it. They’ve put some money away and that will bode very well for their futures.”

Education apparently has something to do with it, too: 36 percent of people with a high school education or less said they had no emergency savings, compared with 10 percent of college grads.

But before you break out the six pack of PBR to celebrate, take note that another portion of our readership doesn’t fare so well in the Bankrate report. In fact, they’re at the opposite end of the spectrum. That is: People between 30 and 49 are more likely than any other age group to have no emergency savings.

What’s going on here? Is age 30 some sort of magical dividing line between smooth sailing and a sinking ship? Not necessarily, but as McBride puts it, “Ages 30 through 49 are high-spending years when expenses often rise faster than emergency savings can keep up.”

Think about it: If you’re getting married, having babies, leasing or buying a new car, or purchasing your first home, you’re taking on added expenses and debt. Some people do all of these things, and that can create huge financial strain no matter how much income you bring home.

In fact, higher income doesn’t necessarily make much of a difference. The overall average starting salary for Class of 2013 college graduates was $45,327 (up 2.4 percent from 2012), according to the National Association of Colleges and Employers.

But let’s say you’re household makes at least 40 percent more than that—$75,000 or higher. The Bankrate report shows that fewer than half of those in that bracket (just 46 percent) currently have a six-month savings cushion.

“Having insufficient emergency income is a pervasive issue,” McBride says. “And the numbers have not changed for better or worse for four years in a row. Even prior to the recession, we’d asked the question once or twice and it was a pretty similar result.”

But this time around, the reason for the emergency savings drought has shifted. “Back before the recession, people didn’t recognize the importance of savings: They used credit cards home equity lines of credit. But the recession changed all that. People recognize the need for emergency savings now. They’re just not making any progress.” In fact, the percentage of Americans with at least three months’ expenses in savings declined from 45 percent last year to just 40 percent this year.

If you’re in the position of having little or no emergency savings, what can you do to reverse the tide and catch up? Consider these action points:

1. Take the idea of emergency savings seriously.

It’s understandable that youth means feeling invincible. But it only takes one medical emergency, a job loss or an event beyond your control to wipe out everything you have. In those cases, having an emergency fund could mean the difference between surviving and struggling. 

2. Use direct deposit to your advantage.

“The first thing you have to do is get in the habit of savings, and the best way to do that is to set up a direct deposit from your paycheck into a dedicated savings account,” McBride says. “If you try to wait until the end of the month to see what’s left over, usually nothing is left over.”

Read more about paying yourself first.

3. Adjust your budget to make room for emergency savings.

“You’ve got to boost your income or cut back expenses,” McBride says. “That means working freelance, getting a second job, or taking a long hard look at your expenses and seeing where you can cut back.”

I learned how to practice what I’m preaching here the hard way. During a recent health scare, I realized I was one of those people with little or no emergency savings. Today, I have five months worth, and it’s gone a long way towards giving me peace of mind.  

How much should be in your emergency fund? Use our calculator to find out!

How does your emergency savings compare to average? Are you ahead of or behind the curve? Let us know in a comment.

Published or updated on July 10, 2014

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About Lou Carlozo

Based in Chicago, Lou Carlozo is a personal finance contributor for Reuters Money, a columnist with, and a former managing editor at AOL's Contact him with story ideas for Money Under 30 at, or follow him via LinkedIn and Twitter (@LouCarlozo63).


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  1. AngelaB says:

    My total savings right now is 1/2 my salary, but much of that is set aside for saving for a new car and home upgrades. What I have actually set aside for emergencies is about ONE month’s salary. I’m trying to get to two months, but as soon as I get ahead I have a car repair or dental bill to pay. I’m 43 and single–I don’t spend excessively, but I’m no miser. It’s hard. One thing was that I was screwed by the housing bubble. I bought a loft right at the height of the bubble and now my loft is worth half that so I’m $65,000 underwater. At least I don’t have student loans. Oh well.

  2. Jeff says:

    This is a stupid article… The only “insight” this article provides is that younger people have lower expenses and simpler financial portfolios. What constitutes an emergency fund? A savings account? Who puts 6 months worth of expenses into a savings account? That’s a lot of wasted cash. Seems to me that all this article says is 30-49 year olds put their money to work while 18-30 year olds do not…

    • Tibby says:

      We keep an emergency fund of 3 months in a savings account, where it is easily accessible, you know, for an emergency.

      • john smit says:

        @Tibby, sarcasm is only going to take you so far in life;especially pertaining to your future. You’re all you have

  3. Jull says:

    I even do not know where to refer myself, until 9 month ago I felt rathe confident having stable income and quite a decent rainy day fund, but now it has really been used all up and the beginning of my 30-49 period I enter without any savings at all. Even the laptop which I had to urgently buy not long ago for working purposes was purchases with the help of a small loan from Personal Money Service. I actually do not see any possibility for myself at present to save at least a little.

  4. Mary says:

    I SERIOUSLY question that recent grads are making $45,000/year in salary. That simply does not ring true. Most are working part-time jobs and interning. Those I know who haves reached that are several years out from college graduation.

    I suspect its an issue of sampling and self-report (those aren’t employed, or are under-employed, or just not happy with their economic situation don’t tend to respond to those surveys. I know I didn’t.)

  5. Nick says:

    Its tough to put money away, take a little bit out for a car repair, put more in, have a medical issue, put more in….and then you realize you’re where you were 3 months ago! The key is to have patience and make it a “game.” The game gets old fast, but trying to live off of $100/week (thats not including utilities & mortgage) has really helped me make a lot of progress in building up my emergency fund.

    For many, I’m sure a lot of their emergency funds go to the downpayment on a vehicle. I know that was the mistake I made prior to college. For now on, I pay a savings account $0.15 per mile I drive. Its not much, but its $20,000 after 133,333 miles. Easy way to save for a vehicle/pay for care repairs and not have to touch the emergency funds.

  6. Ed says:

    It seems to me that the older you are the more money you are statistically likely to make and thus the absolute number of 6 months of expenses (assuming most people live up to their means) is likely to be higher as well.

    I thought I was doing well, but I’m no where near having 6 months saved. Maybe if I’m being charitable, I have 4 months saved, but 6 months will take me a while to reach…

  7. Amanda says:

    I would be curious to know how many people who don’t currently have an emergency savings fund used to have one? Do a large percentage of the people in the 30-49 age group not have one because it has been all used up during the baby having, house buying years or because they never have had one?

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