Apparently, this includes Joe Biden….
Twenty-six percent of Americans has no emergency savings, according to a report by Bankrate.com. Over the past four years, there has been little to no progress when it comes to Americans ‘saving capacity.
Even those who manage to save aren’t putting away enough. As many as two-thirds of people in the U.S. don’t have the recommended six months of expenses saved. The percentage of people with savings enough to cover at least three months shrank to 40 % in 2014, compared with 45%, a year earlier.
Despite Americans being more secure in their jobs and more comfortable with their debt since the recession ended, their savings capacity remains weak even among those with highest-income household. Only 46% of those with annual income of $75,000 or above have enough savings to cover six months of expenses.
“People are not making progress. Incomes are stagnating and expenses are high,” said Greg McBride, Bankrate.com’s chief financial analyst. He said that many people are still struggling with payments from the past years and high household costs.
The report also indicates that the segment of the population aged between 30 and 49 are the most likely to have no emergency fund compared with younger people. “That is alarming because those are the people with a house, two cars and a dog but still with no emergency savings. You need emergency savings,” he added.
Although, people between 18 and 30 years old are more likely to have up to five months savings. Mr. McBride commented that the recession might have had a positive takeaway: younger people learned the lesson and are now saving more.
Mr. McBride doesn’t see any improvement in Americans’ saving capacity as long as there is no substantial income growth.