It can be difficult to put money away for unexpected costs, especially since most Americans are already strapped for cash. We know we’re supposed to set money aside for our emergency savings fund, but too often we choose to put it toward other things. We spend it on rent, want to take a weekend vacation, or simply think we don’t have room in our budgets to save up for the unlikely event that we need to buy a new car out of the blue.
In fact, just over half of Americans have more in savings than they do in credit card debt, a recent survey by Bankrate found. Only 52% have an amount stashed away for a rainy day that’s greater than the amount they owe on their credit cards. That’s decreased from 58% just a year ago, and matches the level from 2011 when Bankrate first began asking consumers about their savings compared to their credit card debt. “This is yet another data point that shows us that there’s been virtually no improvement in the emergency savings cushion for American households,” said Chartered Financial Analyst Greg McBride, Bankrate’s chief financial analyst.
Of all the findings in the report, the lack of growth in people who have more savings than credit card debt is concerning – and also frustrating for people who haven’t been able to “move the needle” despite more discussion about the need for savings. “In a perfect world, that’s 100,” McBride said in an interview. “We’re never going to get 100 percent, but it sure would be nice to get above 52.”
The number of people who have no credit card debt, but who also have no savings jumped from 13% last year to 21% in this year’s survey. It’s good to see some people get out from under credit card debt, but the concerning issue is that people’s budgets are too tight to put any of that money into a savings account earmarked for unplanned problems. McBride said he realizes people don’t have a lot of extra money to throw around, but “They’re just one unplanned expense away from having credit card debt.”