“We are essentially a paycheck-to-paycheck nation,” wrote Mark Hamrick, Bankrate’s senior economic analyst, in the report. “Fewer Americans have the equivalent of a financial safety net to cover inevitable unexpected expenses, despite low unemployment and steady growth.”

Years of high inflation, low wage growth, and challenging job markets have taken their toll, with 73% of the survey’s more than 1,000 respondents saying they are saving less than in years past. 

While 89% of respondents indicated they would need an emergency fund equal to three months worth of their expenses to feel financially secure, 27% reported having no emergency savings at all.

Bankrate’s survey sheds more light on the decaying personal finances of the U.S. consumer. The latest New York Fed data showed that total U.S. consumer debt hit nearly $8 trillion in the third quarter of 2024, a record high. Meanwhile, all 50 states saw their average credit scores decline in 2024.

Nearly one third of Americans are unprepared for financial emergencies

While shocking, Bankrate’s finding that 27% of U.S. adults say they have no emergency savings parallels other recent reports. According to a 2024 survey from Empower, nearly 37% of Americans aren’t prepared to handle a $400 emergency expense. 

More now than ever, building an emergency fund is crucial to prevent unexpected expenses from devastating your budget or your credit score. Inflation rates are cooling and unemployment rates are leveling off, but overall living expenses are higher than they were before the COVID-19 pandemic. 

But there’s a positive aspect to current economic struggles: Interest rates on savings products remain high, as the Federal Reserve has paused rate cuts. At first blush this may seem like bad news, but those looking to build their savings can earn more interest right now than they will when rates fall. 

Consider taking advantage of savings vehicles such as high-yield savings accounts or certificates of deposit (CDs) to tap into that growth potential while you still can.

36% of Americans have more credit card debt than savings

Only 41% of Americans said they’d use their savings to cover a major unexpected expense of $1,000, down from 44% in 2024 edition of the Bankrate survey. This concerning trend illustrates the declining ability of Americans to handle financial emergencies and an increase in the number of people relying on debt to finance them. That, in turn, perpetuates a cycle of debt that can be challenging to escape.

“The cost of living continues to rise, prompting more individuals and households to turn to credit cards when in a bind,” says Hamrick. “They are a terrific tool when used wisely and effectively. But with interest rates still high, we need to avoid a deepening debt burden which could make it more challenging to save.”

Compounding the issue, over one-third (36%) of U.S. adults responded that they had more credit card debt than emergency savings in 2024. Millennials and Gen X led the way here, with 46% and 47%, respectively, saying this was the case for them. 

Gen Z carries less debt, with 32% saying their debt outweighs savings. But for Boomers, this was only true for 24% of respondents.

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Job loss remains a primary concern

Unemployment rates stayed fairly steady in 2024, although data shows that layoffs are increasing in 2025. And since we’ve already noted that savings rates are down, it shouldn’t be surprising that more than two-thirds (69%) of Americans would be worried about covering their immediate living expenses if they lost their primary source of income. 

This fear of job loss correlated directly with the age of the respondents; the closer they were to retirement, the less they feared it. Baby boomers are the most likely (59%) to use savings for unexpected expenses, while a massive 80% of Gen Z respondents shared that unemployment was a great concern for them.

The good news: Americans want to pay off debt and increase savings

There are many economic factors in limbo right now. The future of student loan debt is uncertain, threats of tariffs on imported goods are looming, and credit card APRs aren’t likely to decline anytime soon. But despite the challenging outlook, there is hope: Bankrate found that 36% of U.S. adults are prioritizing both paying down debt and increasing emergency savings, the highest percentage in seven years. 

There is a growing awareness of the importance of balancing debt reduction with building financial reserves, and people are putting in the work. Nearly one-third (30%) of polled U.S. adults said they had more savings in 2024 than they did in 2023—the highest percentage to see an increase like this since 2020. 

Another 29% said their savings levels were about the same, while the remainder saw a decrease or didn’t have any savings to begin with.

Consumers with these goals in mind can—and should—shop around to find the best banks to grow their savings. Banks are eager to attract new customers, with many offering welcome bonuses for savings accounts as well as the more common checking account offerings. 

There’s always fine print to be aware of, but these rewards can be a great boon to new savers—just make sure you take into account any taxes owed on the interest or bonus payouts.