Americans Are Unprepared for a Recession: Survey Finds Americans Focused on Paying Bills, Not Saving

Despite the record economic expansion, many Americans are still focused on keeping up with bills rather than accumulating savings, which means they'll be less prepared if a recession hits.

Although the economic recovery from the Great Recession has continued for more than 10 years, 38 percent of Americans are still concerned about keeping up with their bills, according to a survey from consumer finance company Bankrate released Wednesday. The survey, which was conducted earlier this month among 1,017 respondents, found that 29 percent of Americans were focused on savings and 19 percent were focused on paying debt.

The survey found that individuals earning more money were more focused on saving. Thirty-nine percent of respondents earning $75,000 or more said their primary financial priority was saving, while only 19 percent of respondents earning less than $30,000 said that they were primarily focused on saving, while 51 percent of that income group reported that they were mainly concerned with paying bills.

The survey is the latest from Bankrate that shows many Americans are unprepared for a possible recession, even as concerns about an economic downturn rise.

"Every household that doesn't have sufficient savings will be living on the edge when a recession arises, and in a sense, they're living on the edge even before a recession arises," Bankrate's senior economic analyst, Mark Hamrick, said. "For people who have a sense that they are current on their bills, the logical next step would be to save more money."

Prior surveys from Bankrate and others have similarly raised concerns about the amount of savings that Americans have and noted that the lack of an economic buffer means a recession could be particularly damaging.

A 2018 survey from the Federal Reserve found that 40 percent of Americans wouldn't be able to pay a $400 emergency expense without selling something or borrowing money.

In July, the Bankrate published a survey that found 28 percent of Americans have no savings and only 18 percent had enough savings to pay for six months of expenses.

Despite the concerning state of Americans' savings and ability to weather the financial impact of a recession, data from the National Association for Business Economics released last month found that 72 percent of economists thought a recession would take place by the end of 2021.

Economic readings depict a relatively strong economy, although job growth slowed last month and consumer confidence dropped sharply in September, registering the biggest drop in nine months. The Conference Board, which issues the metric, said that President Donald Trump's escalation of the trade war with China was partly responsible for the drop. Still, unemployment was at 3.7 percent in August.

But concerns about the uncertainty caused by the U.S.-China trade war have contributed to worries that a recession is coming.

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Federal Reserve Chairman Jerome Powell gives a news conference as traders work on the floor of the New York Stock Exchange on September 18 in New York City. Spencer Platt/Getty Images