CFPB Report Finds Consumers Lack Emergency Savings

Making Ends Meet survey from the CFPB’s Office of Research shows trends in consumers’ financial preparedness.

9/25/2020 8:00 AM

CFPBNewsAdvocacy
CFPB Report Finds Consumers Lack Emergency Savings

A new report from the Consumer Financial Protection Bureau, “Perceived Financial Preparedness, Saving Habits, and Financial Security,” shows important trends for the accounts receivable management (ARM) industry to know about consumers’ financial preparedness and savings habits.

“People are aware they should have emergency savings, but many fall short of the amount they think they need. The amount of money people report they and their family ‘need in savings for emergencies and other unexpected things that may come up’ is considerable,” according to the report.

In fact, half of U.S. consumers think they need an emergency savings fund of $10,000 or more; but more than half of people report that their household has $3,000 or less in their savings and checking accounts, the CFPB found.

This report uses data from the CFPB’s Making Ends Meet survey to explore consumers’ savings-related behaviors, experiences and outcomes. The Making Ends Meet survey is a nationally representative survey of adults in the U.S. with a credit bureau record.

Additional findings in the report include:

  • “The amount people report they and their family ‘need in savings for emergencies and other unexpected things that may come up’ rises with household income, but the increases are relatively modest. The median amount people report they need in savings rises from $5,000 for those in the two lowest income groups (household income of $40,000 or less) to $15,000 for those in the highest income group (household income above $100,000).”
  • “21.8% of people in the highest income group have less in their checking and savings accounts than they think they need in savings for emergencies; the share of people is considerably higher—73.9%—for those in the lowest income group.”
  • Among survey participants, 67.9% report that they save money, and 31.1% report that they don’t have a savings plan.
  • “Overall, roughly half of consumers (50.8%) who have less than they think they need report that they save, while the vast majority of consumers (87.%) who have as much as or more than they think they need report that they save. This difference in saving habits exists at every income level.”
  • “Four out of every 10 (40.4%) people report that they had difficulty paying for a bill or expense in the past year. This potential source of financial stress is not only a low-income issue. For example, while 62.4% of low-income people (household income of $20,000 or less) had difficulty paying for a bill or expense in the past year, so too did 17.7% of higher-income people (household income of more than $100,000).

Read more findings in the CFPB report here.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

CFPB Report Finds Consumers Lack Emergency Savings

A new report from the Consumer Financial Protection Bureau, “Perceived Financial Preparedness, Saving Habits, and Financial Security,” shows important trends for the accounts receivable management (ARM) industry to know about consumers’ financial preparedness and savings habits.

“People are aware they should have emergency savings, but many fall short of the amount they think they need. The amount of money people report they and their family ‘need in savings for emergencies and other unexpected things that may come up’ is considerable,” according to the report.

In fact, half of U.S. consumers think they need an emergency savings fund of $10,000 or more; but more than half of people report that their household has $3,000 or less in their savings and checking accounts, the CFPB found.

This report uses data from the CFPB’s Making Ends Meet survey to explore consumers’ savings-related behaviors, experiences and outcomes. The Making Ends Meet survey is a nationally representative survey of adults in the U.S. with a credit bureau record.

Additional findings in the report include:

  • “The amount people report they and their family ‘need in savings for emergencies and other unexpected things that may come up’ rises with household income, but the increases are relatively modest. The median amount people report they need in savings rises from $5,000 for those in the two lowest income groups (household income of $40,000 or less) to $15,000 for those in the highest income group (household income above $100,000).”
  • “21.8% of people in the highest income group have less in their checking and savings accounts than they think they need in savings for emergencies; the share of people is considerably higher—73.9%—for those in the lowest income group.”
  • Among survey participants, 67.9% report that they save money, and 31.1% report that they don’t have a savings plan.
  • “Overall, roughly half of consumers (50.8%) who have less than they think they need report that they save, while the vast majority of consumers (87.%) who have as much as or more than they think they need report that they save. This difference in saving habits exists at every income level.”
  • “Four out of every 10 (40.4%) people report that they had difficulty paying for a bill or expense in the past year. This potential source of financial stress is not only a low-income issue. For example, while 62.4% of low-income people (household income of $20,000 or less) had difficulty paying for a bill or expense in the past year, so too did 17.7% of higher-income people (household income of more than $100,000).

Read more findings in the CFPB report here.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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