More than 4 in 10 consumers with emergency savings have had to tap into those funds during the coronavirus pandemic, according to the latest MagnifyMoney survey.
MagnifyMoney surveyed more than 1,000 consumers to find out how the pandemic has affected emergency funds, looking at everything from balances to when people think they should be used.
- 43% of consumers with an emergency fund have used that money during the coronavirus pandemic. That number jumps to 64% for those who were laid off or furloughed. Even 26% who didn’t lose income needed to dip into savings.
- 54% of those with an emergency fund have taken on debt rather than use that money. When asked why, 28% noted it’s taken them a long time to build up the fund, so they were reluctant to use the money.
- There are various scenarios in which consumers aren’t willing to use their emergency funds. For example, 42% wouldn’t pay off debt using the money in their fund, while 24% wouldn’t be willing to use their fund to cover living expenses after a job loss, which is traditionally one of the primary reasons to have an emergency fund.
- Overall, 54% of consumers have an emergency fund. However, there’s a divide among gender and income. Men are 38% more likely than women to have an emergency fund. And while 83% of those who make $100,000 or more have one, just 30% of those who make less than $25,000 a year said the same.
“The pandemic and the lockdowns caused a surge in unemployment, and the unemployment rate remains elevated,” said Ken Tumin, founder of DepositAccounts. “Many American households that have experienced a job loss had to tap their emergency funds. Even if they were able to avoid drawing from their emergency fund, saving has become more challenging.”
MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,038 Americans, with the sample base proportioned to represent the overall population. We defined generations as the following ages in 2020:
- Generation Z: 18 to 23
- Millennial: 24 to 39
- Generation X: 40 to 54
- Baby boomer: 55 to 74
The survey also included responses from the silent generation (ages 75 and older). However, their responses weren’t included in the generational breakdowns due to low sample size among that age group.
The survey was fielded Oct. 19 to 21, 2020.