The State of Emergency Savings: A Burgeoning Crisis Among Americans

A recent survey conducted by Empower, a leading retirement and financial services firm, reveals a concerning trend in emergency savings among Americans. The study, which sampled 2,202 adults from June 3–5, 2025, found that 32% of Americans have no emergency savings set aside. The disparities between generations are striking: while Generation Z has a median of just $400 in emergency funds, Baby Boomers boast savings up to five times greater.

Financial Challenges: Rising Costs and Stagnant Wages

The financial landscape has made it increasingly difficult for Americans to save. Financial experts generally advise setting aside at least 20% of your monthly income for emergencies. Yet, ongoing inflation, high-interest rates, and stagnant wages mean many are struggling to save anything at all.

According to the survey, over half of respondents report that saving for emergencies feels “almost impossible” amidst soaring prices. With consumer prices jumping 2.9% in August—surpassing the Federal Reserve’s target of 2%—the situation is likely to worsen further. Housing costs, which account for a significant chunk of Americans’ monthly expenses, are at an all-time high, placing additional strain on already tight budgets.

A Deeper Look at Emergency Savings

Alarmingly, 46% of survey participants indicated that their emergency savings account holds less money now than it did a year ago. Moreover, more than 42% confessed their current savings wouldn’t provide any substantial help if they were to lose their job today. This paints a dire picture of financial preparedness among a vast portion of the population.

Gen Z: Navigating Debt and Unemployment

Among the generations, Generation Z faces unique challenges. They not only carry the heaviest debt burden but also encounter high unemployment rates, making it exceptionally tough to manage basic living costs while saving for the future.

While Gen Z is often labeled as irresponsible spenders—frequently allocating funds to travel and dining—they struggle primarily due to hefty student debt. On average, members of this generation are saddled with over $94,000 in liabilities, which includes both credit card debt and student loans. For comparison, millennials carry roughly $60,000 in debt, and Gen X has an average of $53,000. This growing financial strain means that younger generations are less likely to accumulate sizable emergency savings.

The Financial Landscape for Young Adults

Natalia Brown, Chief Compliance and Consumer Affairs Officer at National Debt Relief, highlighted the precarious nature of Gen Z’s financial beginnings. “Many [Gen Zers] are entering adulthood with a heavy financial burden: student loans, credit card debt, and rising costs of living,” Brown reported last month.

The pressure feels heavier for this group as they embark on their careers, often finding themselves simultaneously tackling debt and high living costs. Instead of achieving traditional milestones like home ownership, many are grappling with an ongoing employment crisis. Entry-level job opportunities have drastically reduced, largely due to corporate uncertainties and the impact of automation, which is phasing out many entry-level positions.

Conclusion

The implications of this survey are clear: the need for emergency savings has never been more urgent, yet the barriers are growing. With mounting debt, high living expenses, and stagnating wages, many Americans—particularly the younger generations—find themselves in a financial quagmire. As inflation continues to rise, the urgency to build a safety net becomes paramount, underscoring a pressing need for financial planning and education.

In summary, as the economic landscape evolves, understanding the dynamics of emergency savings will be crucial for future financial stability across all generations.

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