How much money to set aside for emergency savings is more of a moving target than many consumers realize.
Almost a third of Americans are still at square one, with 29 percent telling Bankrate.com they have no emergency savings. That's up from 26 percent last year and the highest rate in five years of queries.
Failing to save is a big misstep, even when there are competing financial goals like saving for retirement or paying down credit card debt. "There are always these things that pop up, that don't normally happen but affect your finances," said certified financial planner Clark Randall, founder of Financial Enlightenment in Dallas. "If you're always handling those with credit, then you're never really achieving what you want to do."
Only 22 percent of the 1,000 adults surveyed by Bankrate.com said they had enough to cover expenses for six months—a five-year low. Another 15 percent said they have savings equivalent to three to five months, and 21 percent can cover less than three months.
But not all of the consumers with less than six months' worth of expenses saved are in the red zone. And even some of those six-month savers may not have enough. "That three-to-six-months rule is just a guide," said certified financial planner Janet A. Stanzak, chair of the Financial Planning Association's board of directors. The ideal emergency savings goal might be as little as three months or as much as two years of expenses, financial advisors say. It all depends on your personal situation.
Several factors could shift the goal amount in one direction or another: