CHICAGO (AP) — Even after the jolt of the Great Recession, a new study finds that most Americans are not financially prepared for an emergency.
A survey released Monday by financial data
publisher Bankrate.com found that only 24 percent of consumers have the
recommended cushion of at least six months' expenses set aside. The vast
majority aren't ready for contingencies; another 24 percent don't have any emergency
savings at all.
With 6.2 million people out of work for half a year
or longer, the results underscore just how unprepared many are at a time when
both job security and the economy pose concerns.
"The majority of Americans still have much
work to do in building an adequate emergency savings cushion," said Greg
McBride, senior financial analyst for Bankrate.
The survey results are somewhat surprising, he
said, in that the high rates of both joblessness and underemployment dating to
the 2007-09 recession have driven home the need for emergency savings. Yet the
challenges of the economy and job market also have limited the ability to sock
money away for unexpected expenses.
Respondents under age 30 and those with annual
incomes under $30,000 were the most likely to report having no emergency
savings whatsoever. Those likeliest to have six months' expenses in an
emergency fund were higher-income households and people in their 50s and 60s.
Fewer than half of those who participated in the
poll had at least three months' expenses in emergency savings -- unchanged from
2007 results.
Discipline is key in building up emergency savings,
McBride said.
The takeaway for consumers, he said, should be to
start putting more money away with every paycheck. If they build their savings
by paying themselves first via automatic deposit, they will gradually move
closer to the six-month savings level and also force themselves to spend less.
Among other survey findings:
— Feelings of financial security, as measured by Bankrate's
monthly Financial Security Index, declined slightly to 97.8 in June from 98.5
in May. Any reading under 100 signifies how much less financially secure people
are feeling than a year ago.
— About 26 percent said they were more comfortable
with their debt compared with a year ago and 19 percent felt less comfortable,
the lowest figure since Bankrate began the monthly polls last December.
Results were based on a telephone survey with 1,006
adults conducted June 2-5 by Princeton Survey Research Associates
International. The margin of error was plus or minus 4 percent.
Copyright 2011 The Associated Press.
