Everyone knows the importance of having an emergency fund, however, high costs and financial instability are making it harder than ever to build a safety net. August's inflation report showed a rise in annual inflation, climbing to 2.9%, the highest level since January.
And according to a new study, 64% of Americans say growing their emergency fund is a top priority, yet the median balance is just $500. Even more alarming, is that 32% of Americans have no emergency savings at all, and nearly half say their current savings wouldn't help if they lost their job today.
For advisors, this highlights a persistent financial gap — not just in dollars, but in behavior.
What Clients Say vs. What They Do
There's no lack of awareness. In fact:
- 75% agree emergency savings are essential to financial security
- 64% say it's a top priority for them
- 52% say they regret not starting sooner
But those good intentions are running into real-world headwinds:
- 39% say inflation is the biggest barrier to saving
- 35% cite high monthly expenses
- 32% say their income is too low or irregular
- Nearly 60% say saving feels "almost impossible" right now
In other words, most clients aren't ignoring their emergency fund, they're overwhelmed by competing financial pressures.
Generational Check-In
So how do different generations stack up?
According to the survey, Boomers are far ahead with a median emergency fund of $2,000. Results also showed that they feel they could handle an emergency expense over $10,000. Gen X is the next highest with an emergency fund of $500, however, the results also showed that they were the most likely to say they couldn't afford an unexpected $400 expense (35%). Gen Z as a higher average than Millennials at $400, however, 1 in 4 don't have an emergency savings. Meanwhile, Millennials came in at the lowest at $300.
Interestingly, younger generations are more likely to be looking for help with 33% of Gen Z saying they've already worked with a financial advisor, while nearly 30% of Millennials said the same thing.
How Advisors Can Help
Emergency savings aren't glamorous — but they're foundational. This is a great place for advisors to provide clarity and calm, especially for clients who feel like they're constantly behind.
Here are several ways you can help:
- Getting Started — Build the habit, no just the fund. Normalize starting small and the importance of it. Reinforce that $100 is better than $0, and it's okay to build slowly. Small, consistent contributions add up over time.
- Emphasize Flexibility — Encourage clients to save something, even without a hard-and-fast "six months" goal.
- Follow Ups — Consider regular check-ins on emergency funds — just like you would with investment allocations. Encouragement goes a long way.
For many clients, emergency savings aren't just about financial preparedness—they're about peace of mind. Helping them take small, consistent steps toward that can be one of the most valuable services you offer.
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