Americans emergency savings are in sad shape, according to a Bankrate.com survey released Tuesday showing that as many as 66 million having no savings at all, reported
Market Watch.
The
Bankrate.com survey of 1,000 adults in the United States, conducted by Princeton Survey Research Associates International, found that about 28 percent of adults in the United States have not saved any income in case of an emergency.
Market Watch equated the percent to 66 million people in the U.S. population.
"People do not have a buffer to shield themselves," Annamaria Lusardi, professor of economics at the George Washington University School of Business Lusardi, told Bankrate.com. "If they are hit by a shock – the car breaks down, the children need braces – they wouldn't be able to face the shock."
"Or they would have to rely on charging more on their credit cards, or take a payday loan, or take a loan out of their retirement accounts. And these, I think, have real consequences," said Lusardi, who also serves as the academic director of the Global Financial Literacy Excellence Center.
Market Watch said experts believe that millions of Americans are facing numerous savings obstacles such as struggling with student loans, medical bills and other debts. Experts also told Market Watch that Americans are not getting much from short-term interest rates from banks, which were just increased in December from 0.25 percent to 0.75 percent.
"Expenses grow faster than many Americans can save during the home-buying, family-raising years," Bankrate.com's chief financial analyst Greg McBride said. "Accumulating emergency savings requires establishing the habit."
In the Bankrate.com survey, 18 percent of the respondents said they have savings for less than three months of expenses, while 16 percent had enough savings for three to five months and 28 percent said they had enough savings for six months or longer. Nine percent of the respondents declined to answer the question.
Of those who do not have any emergency savings, 42 percent had a high school education or less, 27 percent had some college and 10 percent were college graduates. Of those with six months or more of savings, 45 percent were college graduates, 21 percent had some college and 22 percent had a high school education or less.
"To not have any reserves at all is the antithesis of financial planning," Charlie Fitzgerald III, a financial planner and principal at Moisand Fitzgerald Tomayo, told Bankrate.com. "It's one of the first things when you're sitting with a client for the first time, or even clients you've had for a while, you're always wanting to see where, if you need money in a short-term fashion, where is it going to come from?"