A new report from SecureSave revealed the alarming impact high inflation and rising costs are having on Americans’ savings, with a staggering 67% of Americans unable to cover an unexpected $400 expense.
KIRKLAND, Wash. (PRWEB) January 25, 2023
67% of Americans can’t cover a $400 emergency expense, citing inflation as top factor impacting their finances, revealing a drastic decline in personal savings when compared with the Fed’s annual survey
75% of Americans say this increasing financial stress is hampering their work productivity, with nearly 30% spending 1-2 hours a day on money worries, costing employers billions
Results highlight the urgent need for tools to help people build their emergency savings
A new report from SecureSave revealed the alarming impact high inflation and rising costs are having on Americans’ savings, with a staggering 67% of Americans unable to cover an unexpected $400 expense. These results show a drastic decline in personal savings when compared with the Fed’s annual survey, in which only 32% of the respondents said they wouldn’t be able to cover an unexpected $400 expense.
The survey findings come on the heels of the Labor Department’s data, which revealed consumer prices rose 6.5% on an annual basis. The study’s respondents cited inflation as the factor that impacted their finances the most.
In addition to the stress of not being able to cover unexpected expenses, this lack of financial security has resulted in a significant decline in work productivity. 75% of Americans say increasing financial stress is hampering their productivity at work, with nearly 30% of respondents saying they spend 1-2 hours a day on money worries, costing employers billions of dollars.
SecureSave, an emergency savings startup, surveyed 1,106 people across the country, asking them questions about their ability to cover unexpected emergencies expenses, their level of financial security and the impact it is having on their productivity in the workplace. The results were clear: Americans are struggling to make ends meet.
“This data is a huge red flag for our country’s economy: the overwhelming majority of American households are dangerously unprepared for an emergency expense,” said Suze Orman, co-founder of SecureSave. “Having money set aside in an emergency savings account is what helps you keep up with the mortgage and car payments if you are laid off. It is how you avoid running up crushing high-interest credit card debt. It is how you avoid feeling the need to raid your retirement savings to cover an emergency expense. It is what makes you less likely to delay health care when there’s a deductible and copays to deal with. When families’ emergency savings are depleted, it has ripple effects across our economy. We need to take action to help people save during these challenging times.”
3 out of 4 Americans are living paycheck to paycheck, with inflation the top factor impacting their finances
The study also revealed 74% of Americans are living paycheck to paycheck, with 65% of respondents citing inflation as the factor impacting their finances the most. More than half (54%) of respondents say their personal savings have decreased over the last year.
Many employees are spending 1-2 hours of their workday worrying about money
The stress that employees experience from poor financial well-being is bleeding into the workplace, with 75% reporting that the stress of their finances is making them somewhat or extremely unproductive at work and 30% are spending 1-2 hours a day of their workday worrying about money, costing employers an estimated $4.7 billion per week.
Only one third (32%) would be able cover the cost of a last minute, unexpected unexpected bill, like an emergency car repair or medical bill
If faced with a last-minute, unexpected expense, only 32% of respondents would be able to tap into their savings to cover the cost. 1 out of 5 (21%) would need to put an unexpected emergency expense on their credit card and 1 in 4 (24%) would need to ask a friend or family for a loan, while 9% would need to take out a personal loan.
Lack of emergency savings hurts retirement accounts
This lack of financial security is hurting Americans’ retirement security. 61% of Americans said they either stopped contributing to their retirement savings, or never had retirement savings at all, as a result of their financial situation. Of those that did have a retirement fund, 47% have stopped contributing.
Women are disproportionately impacted
SecureSave’s study also revealed a significant gender discrepancy in financial health. Some of the top findings include:
- Personal Savings: Women’s personal savings have taken a much bigger hit in the last year than men’s savings. 64% of women said their personal savings have decreased over the last year, compared to just 43% of men.
- Emergency Expenses: Women are significantly less likely than men to be able to cover an emergency expense. Only 24% of women would be able to use cash to pay for an unexpected emergency expense, compared to 41% of men. And more than half of women (51%) said they wouldn’t be able to cover a $200 or more expense, compared to just 28% of men who said the same.
- Retirement Savings: Women were also significantly less likely to be able to contribute to retirement savings this year. 69% of women said they either stopped contributing to their retirement savings or never had retirement savings at all as a result of their financial situation, compared to only 52% of men. And women were almost twice as likely to report never having any retirement savings – 35% of women compared to only 18% of men.
Americans overwhelmingly support emergency savings accounts
Given the challenges people face in building up savings in the current economy, it’s no surprise that Americans overwhelmingly support employer-sponsored emergency savings accounts. The SecureSave study revealed 87% of respondents would participate in an employer-provided emergency savings fund benefit if it was offered to them.
“The SecureSave study emphasizes the necessity for employers to offer ESAs (emergency savings accounts) through automated payroll deductions to help employees build a rainy day fund,” said Devin Miller, CEO and Co-Founder of Securesave. “Helping employees navigate financial hardships calls for a more straightforward behavioral solution than traditional financial wellness programs, which often focus on educational content. Employees that utilize SecureSave are saving around $103 each month, and 95% of employees keep their savings in SecureSave and don't take it out. An emergency savings fund is the building block of financial security and foundation in helping us feel secure.”
About SecureSave: SecureSave is a financial technology platform designed to help individuals build emergency savings through an employer benefits platform. It was co-founded by Devin Miller, Bassam Saliba, and Suze Orman, who realized that emergency savings needed to be easier and more accessible to help solve the growing savings crisis in the US. Through SecureSave’s platform, employees can set up free emergency personal savings accounts through the ease of payroll deductions, receive matched contributions from their employer and access their money whenever they need it. The average Securesave user saves an average of $103 a month toward an emergency savings account. To learn more about the company, visit https://www.securesave.com.
Survey methodology: Securesave polled This survey was conducted online within the United States by Centiment on behalf of Securesave among 1,106 U.S. adults ages 18 and older.
Tanya Hayre Gillogley