Building up a stable cushion of cash you can rely on in emergencies seems daunting even in normal economic times. Add the steepest loss of Americans’ purchasing power in more than 40 years into the mix, and the task can seem next to impossible.
Prices have climbed on almost every consumer staple, rising 8.3% in August from a year ago — among levels not seen since late 1981. Everyday Americans thus have to make sacrifices with their money to make ends meet. Almost 3 in 5 (58%) said in a February Bankrate poll they had to cut back on spending because household items have gotten so expensive. Another 29% said they’ve had to dip into their savings, while 23% have had to take on credit card debt.
Skyrocketing costs can cause a major hit to one’s financial security. More than half (58%) of adults in a June Bankrate poll said they were concerned about the amount they have in emergency savings, up from 48% in 2021 and 44% in 2020. But some Americans are in a better position to handle inflation than others. Roughly, 4 in 10 (or 44%) have enough savings to cover an unplanned expense of $1,000, a vital fund in the face of higher prices, according to a Bankrate survey.
