Three to six months of emergency expense savings has been the standard caution. Rising inflation, lower purchasing power, and a contracting job market have put a dent in American household savings, and it is safe to say this trend is common among all nations grappling with the cost-of-living crisis. At present, 46% of Americans have enough emergency savings tucked away to cover three months of expenses.
A Bankrate survey found that nearly a quarter of Americans do not have anything saved, while 30% have some savings but not enough to cover three months of expenses. About 19% of respondents said they could cover three to five months of living through emergency savings, and 27% have enough to cover six months. Eighty-five percent of respondents said they need at least three months of emergency savings to feel comfortable, but again, only 46% have that amount saved.
Baby Boomers are relatively fine—41% could comfortably cover six months of expenses. A quarter of Millennials believe they have six months covered, while only 20% of Gen X and 10% of Gen Z could say the same.
Living expenses continue to rise, purchasing power continues to decline, wages are stagnant, and the people are unable to save. The issue here is that the economy is not as robust as data would indicate. In fact, one in three adults tapped into their savings accounts between February 2024 and February 2025. Over 80% of those who took out savings did so to pay for the essentials. Consumers have already tapped into credit, as 33% of Americans have more credit card debt than emergency savings.
Millions of people are unprepared for an economic downturn. This is not the result of poor financial planning but the outcome of abrupt fiscal policy changes. The average person could not have fathomed the current prices of goods. Cheap credit during the pandemic provided the illusion of a government backstop. The Fed lowered rates as the people took on more debt, believing it was “cheap” debt, but everything comes at a cost. This will eventually fall on the banks when the time comes and they are unable to collect. More importantly, civilization becomes utterly unsustainable when the majority are unable to meet expenses. This plays into a larger role of what’s to come as we reach the sixth wave in 2032—the people will have nothing to lose but the current system that has failed them.