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Too Many Have No Emergency Funds


Have we learned nothing from the recession? More than a quarter of Americans have absolutely no emergency funds in place, more than a year ago.

Just three years after the official end of the recession and already Americans are feeling a little too comfortable. According to a new survey, less than a third have no money saved for emergencies.

The Bankrate Financial Security Index found that 28% of Americans have no emergency funds, up from 24% just a year ago. After the recession, financial advisors were suggesting that people have an emergency fund to cover a year or more. Less than half (42%) have three months’ worth saved, while one-fifth have enough to cover less than three months of expenses.

Unsurprisingly, those with higher incomes are more likely to have a sufficient emergency fund, or at least any fund at all. Only 9% of those earning more than $75,000 a year said they have no rainy-day fund. Meanwhile, 52% of those making less than $30,000 have no emergency funds.

Education also plays a factor as 41% of college graduates compared to only 14% of those with a high school education reported having enough savings to cover expenses for half a year.

One reason why more Americans are reporting that they don’t have savings is that they’re working on paying off debt. According to Bankrate, the collective debt load is smaller now than a few years ago because people are paying down credit accounts.

However, Americans are doing better post-recession. In 2006, 61% had less than three months of savings in place. And we’re getting a little more comfortable. Bankrate reported that 18% of Americans are less comfortable with their debt than a year ago, which is a new low and down from 27% back in October.

Read more:

Out of Control: Good Luck Saving for Retirement

Pay Off Loans or Save for Retirement?

The Rental Boom: Top Trends to Watch For

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Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice