State of Emergency: 1 in 4 Americans Don't Have a Financial Safety Net

State of Emergency: 1 in 4 Americans Don't Have a Financial Safety Net

The saying "living on the edge" can be thrilling when it applies to a spontaneous trip or a bold career move.

Yet for a growing number of Americans, it means the sobering reality of living on the financial edge. According to a recent Bankrate.com survey, 29% of respondents don't have any money set aside to cover an emergency expense—an uptick from 26% last year.

In fact, even as the economy and job growth improve, America's savings rate has reached its lowest point in five years. Only one in five responded that they have enough saved to last for three months or less. Another 22% said that their emergency funds could tide them over for six months, the time period financial planners recommend.

"These results are further evidence that Americans remain woefully under-saved for unplanned expenses," said Greg McBride, Bankrate's chief financial analyst, in a statement. "And rather than progressing, [Americans] are moving in the wrong direction."

Despite this lack of financial preparedness, Americans are still generally hopeful about their economic outlook. Bankrate's Financial Security Index has surged in the past year with a 13-month high as of February 2015. The optimism isn't altogether surprising, considering the economy 280,000 jobs last month. Still, the modest 2.3% increase in wages from April 2014 to April 2015 hasn't been enough to help some Americans make ends meet.

A separate survey from Capital One Bank found one in four people struggle to keep up with monthly bills and don't have much left over to save. Another one in 10 admit to regularly spending more than they earn.

Despite the bleak savings outlook, people are generally aware of the need to sock away more, with more than half of Americans reporting that they feel happier when they save.

Need to boost your own emergency savings? A good starting point is to organize your budget using a one-number strategy, which prioritizes paying off fixed costs, non-monthly expenses and funding your savings goals, then using the leftover flex amount to spend guilt-free.

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