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Updated on Monday, June 1, 2020
Amid mounting unemployment claims and a turbulent stock market, the coronavirus pandemic is crippling the ability of many Americans to save for the future. In fact, a new MagnifyMoney survey of over 2,000 Americans reveals a staggering statistic: More than 1 in 4 Americans don’t even have $1,000 saved up. Of those who do have some savings, we found that many aren’t confident it’s enough, as some people resort to raiding their savings accounts to help cover bills and other expenses during the crisis.
- Key findings
- Many Americans don’t have $1,000 in savings
- People aren’t confident in their savings levels
- Consumers are tapping their savings accounts amid the coronavirus pandemic
- More than a quarter of Americans don’t have at least $1,000 saved up. That number jumps to nearly a third of women (32%) compared to just 19% of men.
- We found that 36% of consumers withdrew money from savings within the last month to pay bills. Though the majority of our respondents (40%) took out less than $500, a substantial amount (21%) took more than $1,000 out of their savings account.
- Of those with six-figure incomes, 41% had to tap savings to cover expenses last month, an example of how the COVID-19 crisis has financially strained households across income levels.
- Nearly 4 in 10 consumers are not confident in the amount of money they have saved. Confidence levels vary significantly by gender, age and education level, with women, baby boomers and those who did not graduate from college among the least confident.
- Of those who received an economic impact check, 80% saved at least some portion of it. As expected, those who make more money were able to save more than consumers who earn less.
Many Americans don’t have $1,000 in savings
While the standard benchmark for emergency savings is three to six months of living expenses, our survey found that many Americans are significantly missing the mark. In fact, 26% of respondents reported having less than $1,000 stashed away in savings.
The overall lack of savings was fairly consistent across generations, highlighting that even older consumers who have had more time to save aren’t necessarily at an advantage. Gen Zers were the group most likely to not have $1,000 saved (30%), followed by baby boomers (28%), millennials (26%), those in the silent generation (23%) and Gen Xers (22%).
Understandably, there were vast discrepancies in savings between different income levels, with those making more much likelier to have $1,000 saved up. For example, only 7% of respondents making $100,000 or more didn’t have $1,000 saved, compared to 33% of people making between $35,000 and $49,999 and a whopping 61% of those who earn less than $25,000.
What is surprising, though, is the significant gap in the number of men versus women who don’t have $1,000 stashed away. Only 19% of male respondents said they don’t have $1,000 in savings, compared to a staggering 32% of female respondents.
People aren’t confident in their savings levels
Whether it’s low balances in savings accounts or unease about what the future holds, 37% of our survey respondents said they are not confident about the current amount of money they have saved up across all of their accounts. Not surprisingly, though, we found a strong correlation between households with higher incomes and an increased sense of confidence in their savings.
However, there were stark differences in confidence levels between genders and across generations. We found that women were much more uncertain, with nearly half of women (45%) saying they were not confident in their current savings. Only 30% of men said they weren’t confident in their savings.
Interestingly, our survey found that a sense of confidence in savings is more prominent among younger generations. Only 27% of Gen Zers did not feel confident in the savings they have across all of their accounts, compared to 39% of millennials, 32% of Gen Xers and 32% of people in the silent generation.
Baby boomers were by far the most skeptical of their current savings, with 45% saying they were not confident in how much they have saved up. One potential explanation could be that many baby boomers experienced the 2008 financial crisis during the period that’s considered the peak of their career and, as such, have a firsthand understanding of the financial fallout that can linger from a steep recession.
Consumers are tapping their savings accounts amid the coronavirus pandemic
A previous MagnifyMoney survey found that some Americans are raiding their retirement accounts amid the coronavirus pandemic, and our latest survey echoes a similar sentiment: Some Americans are dipping into their savings accounts to stay afloat, too.
Overall, our survey revealed that 36% of respondents have withdrawn money from their savings account within the last month to pay bills, although 40% took out less than $500 (21% withdrew over $1,000). We found that men were more likely to have dipped into their savings in the past month, as well as millennials, Gen Xers and people with children under the age of 18.
Surprisingly, we found that households making more than $100,000 were more likely to take money out of their savings in the past month compared to those at other income levels. This finding underscores the financial strain felt by all American households as the COVID-19 crisis continues to ravage the economy.
In fact, the majority (80%) of Americans who have received a stimulus check — sent out by the federal government in response to the economic impact caused by the COVID-19 crisis — have put at least some of those funds into a savings account. Even with that sudden boost in savings, many Americans still feel they won’t be able to meet their savings goals for this year. Our survey found that over half (58%) of respondents said that the coronavirus pandemic will likely prevent them from reaching their savings goals for 2020.
MagnifyMoney commissioned Qualtrics to conduct an online survey of 2,049 Americans, with the sample base proportioned to represent the overall population. We defined the generations as follows:
- Gen Z is defined as ages 18 to 23
- Millennials as ages 24 to 39
- Gen X as ages 40 to 54
- Baby boomers as ages 55 to 74
- Silent generation as ages 75 and over
The survey was fielded April 28-May 1, 2020.