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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Over 50% of Americans Can’t Cover a $1,000 Emergency With Savings

Published on:
Content was accurate at the time of publication.

From a leaky roof to a broken bone, life can throw you unexpected costs that must be immediately addressed. When an emergency expense pops up, having adequate savings can help you ride out the storm. Without savings, however, it can feel as if an emergency expense is capsizing your finances when you’re just trying to stay afloat.

In our new survey, we asked Americans about how they would pay for an emergency expense, as well as how they’ve paid for them in the past. The results reveal that high-cost emergencies are fairly common — yet many people are unprepared to pay for them out of savings.

Key points

  • Only 48% of Americans say they could handle a $1,000 emergency expense using cash or savings in their bank accounts. Still, tapping savings was the most common strategy for handling an emergency, followed by borrowing from friends or family.
  • Six in 10 Americans have had an emergency in the past year that cost them $1,000 or more.
  • One-third of Americans are currently in debt from an emergency expense they couldn’t cover.
  • Of Americans who had to go into debt to cover a past emergency, a third still owe $5,000 or more for this expense and about 18% have emergency debt balances of $10,000 or more.

Survey finds 48% of Americans could cover a $1,000 emergency

When faced with an emergency expense, tapping savings to pay for it in cash is the most popular strategy. Even so, less than half (48%) of Americans would be able to cover an emergency of $1,000 or more out of savings.

Older respondents could more easily afford to pay for an emergency expense out of pocket. While just 40% of millennials and 42% of Gen Xers can handle a $1,000 emergency by tapping their savings, 60% of Boomers could do so.

The majority of Americans would have to turn to other options to pay for an emergency:

  • 16% would borrow from family or friends
  • 9% would sell something
  • 9% would use a credit card
  • 7% would work more
  • 6% would get a loan or paycheck advance


In fact, nearly a third (31%) would have to borrow money for an emergency cost, while 16% would try to raise extra money to pay for the expense.

Yet while more than half of people are unprepared to cover the cost of an emergency costing $1,000 or more, such occurrences are surprisingly common. Sixty percent of our respondents said they had encountered an emergency that cost them $1,000 or more in the past year. And 17% had three or more such emergencies crop up over the past 12 months.

One-third of Americans are in debt to a financial emergency

With just under a third of Americans saying they’d have to borrow money to cover a financial emergency, it’s no surprise that about the same number of people say they already have.

That’s right — 33% of respondents say they are still in debt from borrowing money to pay for a previous $1,000-plus emergency.

And repaying these debts can be no small things, considering their balances are often quite high. Of Americans with debt from a past emergency, 33% still owe $5,000 or more, including 18% whose outstanding balances are $10,000 or more.

Emergency debt sometimes sticks around for years, too — 65% of people have had their emergency debt for more than a year, and 28% have owed it for three or more years. Another 35% of people who borrowed for an emergency have carried this debt for less than a year.

Boomers were the most likely to have emergency debts that were five years or older, with 17% carrying such debt.

Millennials were more likely to have such debt, with 40% carrying a balance from a past emergency. They were also more likely to have a higher balance on their emergency debt, with 28% of older millennials’ outstanding balances at $5,000 or higher.

How to start your emergency fund

Building an emergency fund is an important part of a sound money plan. These savings protect your daily money management from a meltdown brought on by an unexpected cost. Emergency savings also provide you with financial security and greater peace of mind.

The basic emergency fund is at least $1,000 in savings — the amount we asked about in this survey. Stashing away $1,000 in emergency savings isn’t easy for everyone, but it’s a goal that’s worth putting in the effort and thought to make happen. Here are some steps you can take to start building your emergency fund:

  • Make saving money automatically. Figure out an amount out of each paycheck that you could save without missing too much — even if it’s just $10 or $20. Then set up an automatic transfer that will move this amount into your savings each pay period, either through your payroll deposits or your bank account. Consider opening a high-yield savings account to see your emergency fund grow on its own, too.
  • Take your spending off of autopilot. Many people spend without much of a second thought, especially on purchases that are simply part of a normal routine. But try, for a while, to pay closer attention each time you make a purchase and consider if you really need or can afford it. Switching from a card to cash can be a great way to upgrade your awareness of spending.
  • Look for small ways to save. As you’re tracking and watching your spending more closely, you might find some easy and painless ways to save. If you usually eat out for lunch at work, for example, packing leftovers every Monday instead could save $10 to $15 per week. You can then add these savings to your emergency fund, instead.
  • Review recurring expenses. Consider canceling monthly costs you don’t need or use, such as a gym membership or a video streaming service. Even for your basic bills such as cell phone or auto insurance, consider shopping around for a better deal or calling your service provider to negotiate a better rate.
  • Make some extra cash. Don’t wait until an emergency to try to pick up more hours or sell something for extra cash. You can take those steps now to make some more money to add to your emergency fund.


Put in the work, and you can start to build up a buffer for your bank account. With an emergency fund in place, you have cash on hand that you can use as a buffer to cover these out-of-nowhere costs. You can use savings to pay for the emergency and keep your life functioning — without having to get into debt or otherwise derail your finances.

Safeguarding your finances during an emergency

Having an emergency fund in place is the best way to safeguard your finances from unexpected costs. But saving this up could take some time — and even if you have your emergency fund in place, you could still find yourself finding an emergency that costs more than you have saved.

Besides saving an emergency fund, here are some other options to consider for handling an emergency.

  • Keep your credit score high. Most people who can’t rely on savings to pay for an emergency will instead borrow money. But getting an emergency loan will be easier, faster and more affordable if you maintain good credit. If you have a higher credit score, lenders are more likely to approve your application for credit, and you’ll also more likely to get lower rates that can keep emergency debt affordable.
  • Compare borrowing options. Before you reach for your credit card, consider if there might be a better way to borrow. An installment loan might provide a better deal, so look into taking out a personal loan or home equity loan. You could also open a new credit card with a 0% APR introductory rate and use this to pay for the emergency expense and repay it interest-free.
  • Pay emergency debt down quickly. People carrying around emergency debt might want to consider if there’s a faster or smarter way to pay it off. For example, following the debt avalanche method to make extra payments on emergency debt can get rid of it faster and help you avoid interest costs. Or debt consolidation could help them restructure this debt so it’s simpler, saves them money or fits more easily into their budget.

Thinking about what you might do to cover such an emergency now can help you prepare and put a plan in place. You can then rely on your emergency plan to get past panic and take action in a time of crisis.


LendingTree commissioned Qualtrics to conduct an online survey of 1,000 Americans, weighted for demographic representation. The survey was fielded December 1 – 5, 2018 with a margin of error of +/- 3%.