Only 44% of Americans can afford a $1,000 emergency expense, says Bankrate (2024)

FAQs

Only 44% of Americans can afford a $1,000 emergency expense, says Bankrate? ›

Key takeaways. More than 1 in 5 Americans have no emergency savings at all, according to Bankrate's 2024 annual emergency savings report. Only 44 percent of U.S. adults are able to expense $1,000 or more in an emergency from their savings according to Bankrate's survey.

Less than half of Americans (44%) say they can afford to pay a $1,000 emergency expense from their savings, according to a new Bankrate survey. This is up slightly from 43% in 2023, and at the same level as 2022.

How many Americans have $100,000 in savings? About 26% of U.S. households had more than $100,000 in savings in retirement accounts as of 2022, according to USAFacts, a nonprofit organization that analyzes data from the Federal Reserve and other government agencies.

While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months' worth of expenses.

Nearly Half of Americans Don't Have $500 in Savings

According to the survey, 49% of Americans have $500 or less in their savings account, with 36% reporting they have less than $100 saved up. This means that a small financial upset can cause these households to end up in debt — or more debt.

But only 44% of Americans are prepared for a $1,000 emergency expense, according to a survey from financial analysis site Bankrate. While a percentage point higher than last year, most people still say they would be derailed by such a crisis.

Starter emergency fund: If you have consumer debt, you need a starter emergency fund of $1,000. This might not seem like a lot, but it's just a temporary buffer while you pay off that debt. Fully funded emergency fund: Once that debt's gone, you need a fully funded emergency fund of 3–6 months of expenses.

Can I retire on 500k plus Social Security? As we have established, retiring on $500k is entirely feasible. With the addition of Social Security benefits, this becomes even more of a possibility. In retirement, Social Security benefits can provide an additional $1,900 per month, on average.

The poll also found that among those who have been saving for retirement, 6.7% have saved between $10,000 and $49,999, 12.6% have saved between $50,000 and $99,999, 12% have saved between $100,000 and $199,999, 9.9% have saved between $200,000 and $299,999 and 16.5% have saved $300,000 or more.

If you retire with no money, you'll have to consider ways to create income to pay your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.

How many people can afford a $500 emergency? ›

Sixty-eight percent of adults said they could pay an expense of at least $500 using only their current savings (table 12).

If six months' worth of expenses seems like way too much to save in a short time period, start smaller. Make a goal of $1,000 or $2,000. Once you reach that, up the ante. You'll feel good about reaching a goal and watching your emergency fund continue to grow.

The American Rescue Plan Act of 2021 established a new $1 billion Pandemic Emergency Assistance Fund to assist needy families impacted by the COVID-19 pandemic. States, the District of Columbia, tribes operating a tribal TANF program, and all five U.S. territories are eligible to receive funds.

The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.

That's up from 51 percent in 2023 and is the highest percentage since 2018. Additionally, 10 percent of Americans have no credit card debt or emergency savings at all, the lowest percentage in the poll's 14-year history: Note: Not all percentages total 100 due to rounding.

But it is possible to live well even on a small amount of money. Surviving on $1,000 a month requires careful budgeting, prioritizing essential expenses, and finding ways to save money. Cutting down on housing costs by sharing living spaces or finding affordable options is crucial.

Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.