By US Daily Review Staff.
Nearly half of Americans (49%) do not have enough emergency savings to cover three months’ expenses, up from 46% last year at this time, according to new research released today by Bankrate.com (NYSE: RATE). Twenty-eight percent have no emergency savings (up from 24% last year). The generally recommended cushion is six months’ expenses, and only 25% of Americans have saved that much (compared with 24% last year).
A similar Bankrate.com poll that was taken in 2006 found that, at the time, a whopping 61% of Americans failed to have enough emergency savings to cover three months’ expenses. “While we’ve seen some improvement since then, the bottom line is that much more progress is needed,” said Greg McBride, CFA, senior financial analyst for Bankrate.com. “Having sufficient emergency savings is critical to avoiding high-cost credit card debt when unexpected expenses arise.”
Bankrate.com also released its June 2012 Financial Security Index results today. The index held steady at 100.8. Readings greater than 100 indicate improved financial security over one year ago; this is only the second time since polling began in Dec. 2010 that Americans are feeling greater financial security than 12 months prior.
There were two noteworthy improvements over the past month:
- Thirty-two percent of Americans are currently reporting that they are less comfortable with their savings versus one year ago, a new low and down from the peak of 47% that were less comfortable in August 2011
- Eighteen percent are less comfortable with their debt than 12 months ago, a new low and down from the peak of 27% in October 2011 and November 2011
The stock market correction that began in May has minimally affected how Americans feel about their net worth, with the reading virtually unchanged from last month. Twenty-six percent report higher net worth than this time last year, down a tick from 27% in May, while 51% report the same net worth as last year, up a tick from 50% in May.
Americans’ overall financial situation is still seen as positive, but is down slightly from May. Currently, 24% are reporting a better overall financial situation compared to one year ago, down from 28% last month. Fifty-four percent feel about the same as last year (compared with 49% that said so last month).
The new survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here: http://www.bankrate.com/finance/consumer-index/financial-security-charts-0612.aspx.