The good news: Americans are getting better about saving money for a financial emergency.
The bad news: Americans are still pretty bad about saving money for a financial emergency.
The really bad news: Older Americans — the ones who should know better! — are actually the worst about saving money for a financial emergency.
According to a recent survey by bankrate, nearly a third (32 percent) of all baby boomers between the ages of 53 and 62 polled had no emergency savings. As in, zero. Despite their being close to retirement age, that’s the lowest percentage of any age range surveyed.
Financial experts advise that people maintain an easily accessible fund with 3-6 months worth of expenses on hand in case of an emergency, financial or otherwise. Bankrate chief financial analyst Greg McBride said that the alarmingly high percentage of young boomers who don’t have anything saved for such a scenario is due largely to the recent recession, which affected their age group disproportionately through investment losses and prolonged unemployment. The news is better for those 63 and older — that age range had the lowest percentage of respondents with no emergency savings. And nearly half of those 63 and older had at least 6 months of emergency savings squirrelled away.
Overall, the survey found that 24 percent of all Americans have no emergency fund savings, which actually represents an improvement: It’s the lowest percentage since the polling began in 2011. On the flip side, 31 percent of all those polled now have the requisite six months of cash to cover expenses on hand, also the best number since the survey started.
One of the more surprising findings in the survey was how well oft-maligned millennials fared. Though baby boomers were more likely to have saved enough to cover more than six month expenses, millennials were far more likely to have between three to five months of expenses covered, and were less likely than their older counterparts to be neglecting their emergency funds entirely.
Life stages certainly play a part — fewer millennials are supporting families, and more of them than ever are still living with their parents (most of whom are baby boomers). But analysts say that boosting your emergency fund savings is an important step to securing your financial future and alleviating stress, no matter what your age or circumstance.
Step one, says McBride, is setting up automatic savings deposit from whatever source of income you may have.
“You need to make a conscious decision to save today,” he told Fortune. “There’s not a magic pill that can do that for you.”
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