The most alarming personal financial statistic in the country is the one showing that just 40 percent of Americans have enough savings to pay for an emergency.

It’s also the dangerous condition that nearly every one at risk could fix, easily, without help, over a matter of months.

At a time when the economy is healthy and the stock market has seen almost nothing but blue skies for over a decade now, the number of Americans who can’t pay cash to cover an emergency has remained virtually unchanged, and that means that while people are doing better financially – and say as much – they’re not actually saving or preparing any better than they have in the past.

While the economic recovery hasn’t touched everyone – there are still many victims of circumstances from health and medical problems to being dedicated to old-economy jobs that are fading out – the truth is that everyone who can say they have benefitted from the strong times should have been able to save up at least a thousand bucks by now.

If you haven’t gotten this one right, blame yourself, and then go fix it.

The latest Financial Security Index was released last week by; it is the widely quoted poll about Americans and their ability to pay for an unexpected $1,000 car repair or emergency room visit from savings.


Just 41 percent of U.S. adults said they could cover an emergency, with another 37 percent saying they would need to borrow money somehow to pay the bill. has been asking this particular question since 2014, and the percentage of Americans who would be thrown by a $1,000 emergency is always around 60 percent.

And that’s before we look back to last summer, when the Financial Security Index polling found that 28 percent of American adults have no emergency savings whatsoever, with another quarter of the population having a rainy day fund that is insufficient to cover three months’ worth of living expenses.

“We don’t see a trend towards improvement,” said Greg McBride, chief analyst for in an interview on “Money Life with Chuck Jaffe.” “That’s what’s troubling. We have had a decade-long plus economic recovery, and yet we’re just not seeing the needle move with regard to something as fundamental to financial security as emergency savings. It makes the hair on the back of your neck stand up when you think about ‘Gee, what’s going to happen when we do have an economic downturn.’”

It’s not hard to imagine the outcome; the point is to avoid living that horror film in your own life.

The same Bankrate poll has always found that roughly one-in-four Americans gets hit with a big unexpected expense in any year. So if you didn’t get blasted last year, your time is coming in the next two or three.


But $1,000 in emergency savings for those who had it on hand wasn’t close to enough for those who faced real troubles, according to Bankrate, because the average unplanned expense that hit home last year wound up costing roughly $3,500.

What that means is that even the people who have saved for the day when they’re hit by the unlucky stick will see their finances bruised, all the more reason to plan and save.

No one should think that true savings is easy and painless. Everyone has bills, needs and wants.

For years, personal finance experts have talked about brown-bagging lunches and brewing coffee at home and skipping the drive-thru as a means of cutting spending to improve savings. Truthfully, that’s not much more than a start, largely because it reduces spending without necessarily increasing savings.

But there are many ways to put the focus on savings; while they might not make you rich, they will get you through trouble.

Case in point, several years ago I stopped spending my $1 bills, plus all of my change. I planned to make it like a vacation-club account for my daughters and me, dipping into it to pay for trips and the alike. While we took one big trip a few years ago, my girls’ busy schedule has made it that the next big trip hasn’t happened yet; meanwhile, just saving the singles and change has built up a war chest of more than $4,000.


This year, in addition to that savings, I agreed to a challenge to not spend any $5 bills. I will own up to the fact that cash spends fast when you save everything smaller than a tenner, but there’s about $60 in five-dollar bills in that savings jar in the first month, so that habit could add up to another $500 saved this year.

You can do the same with a number of “keep the change” financial apps that let you round up your expenditures paid by debit card to make sure that you are saving as you spend.

“Saving is all about the habit,” said McBride. “The key to saving is to establish that habit. If you wait until the end of the month to try to save what’s leftover, it’s not going to happen. Even if it does, there is no consistency to it. Flip that around, pay yourself first, have that direct deposit from your paycheck into a dedicated savings account so it happens automatically before you roll out of bed on payday morning. Set up that direct deposit today for just $20 a week, that gets you to about $1,000 by year’s end.”

It also changes the dynamic by not allowing you to spend your entire paycheck, forcing you to live on less than you make.

That is the essence of building not only emergency savings but real wealth.

Start with making sure you are on the right side of the $1,000 emergency-savings numbers. That goal is straightforward and easily achieved; take that first step and walk that short path and you will eventually get on the right side of virtually all savings and investing statistics.