Lesson from the recession not learned
+ READ ARTICLEFamilies in the U.S. still don’t have a substantial amount of cash tucked away for a rainy day despite the beating the economy took in the Great Recession, according to a new survey.
The Financial Security Index from Bankrate.com shows half of American families have no savings or less than three month’s worth of expenses saved for emergencies. The survey’s findings, analysts note, haven’t changed since 2011, when the company first began inquiring about the saving habits of American families.
[time-brightcove not-tgx=”true”]“Americans continue to show a stunning lack of progress in accumulating sufficient emergency savings,” said Greg McBride, Bankrate’s chief financial analyst.
Analysts say the recession—during which Americans lost about $16.4 trillion in household wealth by 2011—should have been a learning experience, but the struggle of juggling household expenses has left many without extra funds to put away.
Not all Americans are failing to save. About 23% of those surveyed have savings that will last them six months or more in case of a financial emergency—the recommended stash amount. What’s more, the majority of those saving big have larger incomes, though only about 46% of those making $75,000 or more have over six months worth of expenses stored away.
The website notes that while three to six months worth of savings may sound like a lot, starting small and increasing the amount being put away over time can pay off quickly.