MIAMI VALLEY — One in three Americans have more credit card debt than emergency savings, according to a new study by Bankrate.
Half of Americans say they’d be able to afford a sudden $1,000 expense.
As reported on News Center 7 at 5:30, Consumer Reporter Xavier Hershovitz breaks down the study’s findings and what those who are struggling to save should do.
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“Americans have been under-served for emergencies...For quite a long time,” Bankrate Chief Financial Analyst Greg McBride said.
Over the last several months, Bankrate found that Americans are struggling to save money.
“36% of households have more credit card debt than they do emergency savings, which along with last year, is the highest that we’ve seen,” McBride said.
Inflation has amplified the savings problem, forcing many Americans to turn to credit cards to make ends.
“This is a national problem…Only 30% of Americans actually have enough to cover six months’ worth of expenses. But the other end of the spectrum is really disconcerting. 22% of Americans have no emergency savings,” McBride said.
Starting to save successfully is all about habit.
“The sooner you establish that habit, the longer it will stick with you, you just can’t expect to flip a switch at a certain age or a certain income level and suddenly become a good saver. That habit is built over time,” McBride said.
The easiest way to do that is to pay yourself first.
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“Set up a direct deposit from your paycheck into a dedicated savings account. That way, the savings happens automatically, before you roll out of bed on payday morning,” McBride said.
From there, you want to target debt.
Work with your credit card companies to set up a payment plan you can stick with while continuing to save.
“It’s not so much about one or the other as much as attacking both of those simultaneously,” McBride said.
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