As was mentioned by the recent Bankrate.com report, for Feb. 23, 2016, approximately 52% of the US residents, compared to 58% in 2015, have been saving for an emergency rather than having their credit card debt.
What is more surprising, the percentage remained the same as it was in 2011, which made a zero progress since a surge of the stock market and a slump of unemployment.
Nowadays, people below the age of 30 would rather get emergency money or have an emergency savings amount than taking a credit card debt. The reason for this phenomenon is explained by Greg McBride, the Chief Financial Analyst of Bankrate.com.
“The society believes that millennials are used to spending money carelessly here and there, although most of us have learned some of the very useful lessons from our parents. Among that is being financially prepared for the rainy day. That’s because millennials did grow up in times of instability: foreclosures, high level of unemployment and plunging stocks taught them to be ready for the worst.”
Moreover, McBride considers the other reason for growing their savings to be their aversion to using credit cards with high interests.
Approximately 53% of men and 50% of women confirmed to have an emergency savings account as an opposite alternative to having a credit card debt (find out whether you need a personal loan to pay off the credit card). At the meantime, we can witness the percentage increase (from 13% in 2015 to 21% in 2016) of Americans, who neither have a credit card debt, nor savings.
Talking about positive changes, only 22% of the US residents are being dependent on their present credit card debt, which is actually the lowest number in past 6 years. According to the conducted PSRAI research, the Financial Security Index(FSI) has risen to 103.0, up from 101.5 in January.
During the survey, American’s were also asked how they felt about the level of their job’s security, the comfort level of their debt and how they felt about the overall financial situation. As it turned out, most of the Americans felt positive improvements in 2016 compared to the last year.
Methods Used For Conducting the Survey
PSRAI used telephone calls for interviewing 1,002 adults, who live in the continental part of the US. Almost half of the interviews were conducted via landline phone (502) – 500 of interviewees used cell phones. According to Princeton Data Source, the survey started on February 4 and completed on February 7, 2016. English and Spanish languages used. The margin of sampling error is ± 3.6 percentage points.
You can also see a very interesting chart that presents parents’ saving behavior provided by statista.com.
About Bankrate, Inc.
This is an American consumer financial services company, distributing personal finance content across the Internet. Bankrate networks with many websites, such as their personal website Bankrate.com, as well as CreditCards.com, Caring.com and other owned websites, like Interest.com, Bankaholic.com, CreditCardGuide.com, Mortgage-calc.com, and CreditCards.ca.
Operating over 600 local markets, the company conducts ratings and researches in all 50 states of the United States. Bankrate cooperates with more than 500 newspapers, including The Wall Street Journal, the New York Times and USA Today, and provides them with a licensed editorial content.
By the way, if you actually made a decision to start your own emergency savings, the first question is always, “How much emergency savings should I have and where to put emergency savings?”. Not surprising, the best way to store emergency savings is definitely a bank savings account.
It is separated from your primary spending one and the best amount of your savings can be counted with an emergency savings calculator, which you could also find on Bankrate.com, and an article from Personal Money Service about how you can save money easily.