How many Americans have a six-month emergency savings fund?
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The Covid-19 pandemic has changed lives in many important ways. And perhaps one of the most surprising is an increase in personal savings.
The latest analysis from Morning Consult economist John Leer found that a third (33%) of US consumers with incomes between $50,000 and $100,000 have enough savings to cover at least six months of expenses. of subsistence. Additionally, the gap between high-income savers (those earning more than $100,000) and middle-income savers has narrowed to its lowest level since May 2020, when Morning Consult began tracking .
With this news comes the arrival of tax refunds and stimulus checks for more than 127 million people. The $1.9 trillion American Rescue Plan Act also included a variety of additional measures to put more money in Americans’ pockets, including expanded child tax credits and health insurance subsidies. Families who meet the income requirements could be eligible to receive $1,400 per adult per dependent, so a family of four could receive a total of $5,600 in stimulus payments alone.
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The increase in savings, combined with the windfall fallout from the stimulus, may make many Americans feel like they can relax knowing their basic expenses are covered in an emergency. This influx of money opens up opportunities for how to use it, Leer argues in his study.
This could translate into greater purchasing power than we have experienced since the start of the pandemic. Over the next six months, Leer predicts more middle-income people will be well positioned to spend money on goods, services and experiences like getaways and vacations.
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Even if you can’t wait to take a vacation or go shopping once the world starts to reopen after the pandemic, be sure to save at least some of your savings. Experts recommend setting aside three to six months of emergency expenses. And if we’ve learned one thing during the pandemic, it’s that an unexpected crisis can last far longer than anyone is prepared to handle.
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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.