‘One emergency away;’ Study shows half of American’s can’t afford emergency expenses

A study shows that more than half the country doesn’t have enough money saved to pay for a $1,000 emergency expense.

Ellery Harvey is one of those people. Harvey is almost 40 years old, works multiple jobs, and still can’t save money.

“I’m one emergency away from total bankruptcy at all times,” Harvey said. “I make good money, too. I’ve got a good job but it’s too expensive to live in the city.”

Bankrate’s 2024 emergency savings report found that Harvey is not alone, with more than 50% of people can’t afford to pay for a $1,000 emergency expense.

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“We need to do better in terms of saving for emergencies,” said Mark Hamrick, Senior Economic Analyst at Bankrate. “What this really spotlights is the high degree of financial fragility in this country.”

Bankrate’s survey pool included more than a thousand U.S. adults and found only 44% could use savings to pay for a $1,000 emergency expense. 35% told Bankrate they would have to borrow money, either through a credit card, a personal loan or asking friends and family for help.

“You don’t have to start [saving] big, but you have to start,” Hamrick said.

There are three steps to help you start saving money.

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Figure Out How Much You Need:

According to Bankrate, most experts recommend saving three to six months of expenses. If your monthly bills total $2,000, your goal over time should be to save at least $6,000.

“This is not a concrete rule,” officials at Bankrate said. “You may need to save more if you are self-employed and anticipate a lean month, or if you are preparing for economic hardship, such as a hiring slowdown or a recession.”

Open A Separate Account:

Having a separate online savings account or money market can allow you to put away emergency funds.

“This is an opportune time to really take advantage of the superior yields on savings that are part of the equation of a higher interest rate environment,” Hamrick said.

Make A New Budget Around Saving:

When making a new budget, cut out unnecessary expenses and stick to good spending habits. If you use direct deposit for paychecks, Hamrick recommends sending a portion of your paycheck directly to your savings account.

“If you pay yourself first, then you will have that money to use for whatever purpose, including an emergency expense of $1,000 or more,” Hamrick said.