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While inflation is high, 58% feel nervous about their savings


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As record inflation persists in the United States, Americans are feeling a new side effect – insecurity around their emergency savings, according to a new survey from Bankrate.com.

The percentage of people who are not comfortable with the amount of money they have saved is now 58%, up from 44% two years ago, according to the June survey.

Meanwhile, the number of people who say they are comfortable with their emergency savings is now 42%, up from 54% two years ago.

Still, there are signs that people might have more money to spare now than in the past.

The poll found that 23% of respondents had no emergency savings, up from 25% last year. That’s one of the lowest levels in 12 years of polling by the personal finance website.

Meanwhile, 27% of households have enough emergency savings to cover six months or more of expenses, up from 25% over the past two years. This is the highest since 2018.

“Despite having more savings, the comfort level is down,” said Greg McBride, chief financial analyst at Bankrate.com. “Inflation being at four-decade highs will erode your comfort level in the purchasing power of your emergency savings.”

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The survey was conducted online and by phone between June 3 and June 5. It included 1,025 respondents.

Another reason people may feel less secure with their emergency cash is that they may have less than they did a year ago.

About 34% of survey respondents had less emergency savings than a year ago, while less than 24% of people said they had more.

“With inflation as high as it is…it’s an indicator that you’re counting on that excess savings at a time when inflation is outpacing wage gains,” McBride said.

Admittedly, it can be difficult to find extra money to put aside when prices are higher everywhere.

How to improve your savings

One possible solution is to pay yourself first, if you have the wiggle room to save some money.

“It’s best to just whittle down those savings before you even see them, and then build the budget around what’s left,” McBride said.

“It’s really hard to go the other way in this environment because costs are rising so quickly,” he said.

One of the good things about savings is that as interest rates rise, savers get a better return on their money.

Many households with savings have that money in accounts earning just 0.01%, McBride said. Now, online savings accounts pay more than 1.5%, which is increasing day by day, he said.

“There is an immediate 150x increase in interest income while preserving access to money and federal deposit insurance protection,” McBride said.

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