Americans are making some gains in their emergency savings, but the reality is still far from stable. A recent Bankrate report shows that while 30% of U.S. adults have more emergency savings than they did a year ago, a staggering number are still struggling to cover unexpected expenses without going into debt.
The trend of Americans increasing their savings has been gradually improving, up from 26% in 2023, thanks in part to easing inflation. Inflation in January 2025 stood at 3%, down from the brutal 6.4% rate in 2023, allowing some breathing room for households to rebuild their financial buffers. However, that improvement isn’t reaching everyone. The number of Americans who say they have less savings than a year ago has also declined, but 27% still report having fewer savings than last year, showing that financial struggles remain widespread.
Perhaps the most concerning statistic is that only 41% of Americans could afford an emergency $1,000 expense from their own savings, the lowest percentage since 2021. That means the majority of the country is one car repair or medical bill away from financial crisis. And where do they turn? Credit cards. A full 25% of respondents admitted they would put a $1,000 emergency expense on plastic, up from 21% last year. With interest rates still painfully high, relying on credit cards for emergencies is a fast track to financial disaster.
Bankrate’s Mark Hamrick summed it up best: America is still a “paycheck-to-paycheck” nation. Despite steady job growth and a recovering economy, millions are still struggling to build financial security. The U.S. personal savings rate, which once soared above 10% during COVID lockdowns, has plummeted to below 5% in most months since 2022.
The long-term effects of Biden-era inflation haven’t gone away. Between 2021 and 2025, essential goods skyrocketed in price—eggs up 237%, milk up 16%, bread up 24%, and chicken up nearly 30%. Everyday essentials are more expensive than ever, leaving Americans with less to save.
Adding to the problem, Americans are drowning in debt. A Feb. 13 study by Achieve found that 26% of households have taken on new debt in the last three months alone. Achieve co-founder Andrew Housser warns that once families fall into debt, it can take months or even years to recover.
So where does this leave the average American? Struggling under the weight of debt, unable to afford rising costs, and forced to rely on credit cards just to survive. The Biden-era economy left Americans battered, and even as President Trump pushes for economic recovery, the damage is still evident.
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