Money Matters - Inflation and Emergency Savings

 With many Americans struggling to build a financial safety net, the personal-finance website WalletHub today released its 2025 Emergency Savings Survey, highlighting the biggest obstacles to saving for a rainy day and people’s expectations for their progress this year. You can find highlights from the survey below.

Key Findings:

• No Room to Save: 51% of Americans say their income prevents them from saving for emergencies, while 44% blame inflation and 34% point to their debt.
   
• Skipping the Safety Net: More than 1 in 4 Americans never contribute to their emergency fund.

• No Savings to Save the Day: Nearly 1 in 5 Americans say they couldn’t come up with $1,000 in cash within 24 hours to save a loved one’s life.
   
• Debt First, Savings Later: Nearly 2 in 5 Americans say paying off debt is their top financial goal, prioritizing it over things like building an emergency fund and contributing to their retirement savings.
   
• Hoping for a Bailout: 22% of people expect someone else to bail them out if they run out of money.
   
• Shrinking Savings Ahead: Nearly 1 in 4 people say their emergency savings will decrease in the next year.
  
   

“Many Americans are just a minor financial emergency or unexpected expense away from having a whole new set of very serious financial problems, including significant credit score damage and even bankruptcy in some cases. A new WalletHub survey found that 51% of Americans say their income prevents them from saving for emergencies, and more than 1 in 4 people admit to never contributing to an emergency fund. Around one-quarter of people also expect their emergency savings to decrease in 2025. The prescription for a lack of savings is to set up a budget. A strict budget will eliminate unnecessary spending and make room for monthly contributions to an emergency fund. Your goal should be to set aside at least 3-6 months’ income for a rainy day, and I promise you’ll be happy you did when that day comes.”

- John Kiernan, WalletHub Editor


 

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