If your basement floods or your car breaks down, you may not have enough money to cover the bill. Especially if you’re a millennial.
A new survey from LendingTree finds that 6 out of 10 millennials (which LendingTree classifies as those aged 22 to 37) say they don’t have enough put away to handle a $1,000 emergency expense, meaning they would have to raise the funds by borrowing them, putting them on a credit card, or by selling something. The survey, conducted earlier this month, asked 1,000 U.S. adults about their savings level.
Over half of Americans, 52 percent, say they couldn’t do it, either. Baby boomers (ages 54-72) fare the best, with about 60 percent saying they could handle a $1,000 emergency by using cash or savings.
Gen-Xers (ages 38-53) are only slightly better off than millennials, with about 48 percent saying they’d be OK.
Americans carry a lot of debt, which makes saving challenging. The average American owes about $38,000, excluding home mortgages, according to Northwestern Mutual’s 2018 Planning & Progress Study. Older millennials (those aged 24 to 34) have an average of $42,000 in debt, while Gen Z & younger millennials (ages 18-24) have about $22,000, Northwestern finds.
Meanwhile LendingTree finds that a third of Americans say they’re still in debt from borrowing money to pay for a previous crisis. Of those who are still carrying debts from earlier emergencies, 33 percent owe $5,000 or more, while almost 20 percent owe over $10,000.
Systemic issues are also to blame, says Alissa Quart, executive director of the Economic Hardship Reporting Project and author of the recently released book, “Squeezed: Why Our Families Can’t Afford America.” Middle-class life is now 30 percent more expensive than it was 20 years ago, she writes.
And millennials are in a much deeper financial hole than other generations. The Center for Household Financial Stability at the Federal Reserve Bank of St. Louis found earlier this year that those born in the 1980s, who came of age during and after the Financial Crisis, had a median net worth 34 percent lower than previous generations had at the same age.
Having an emergency savings fund is one of the most important steps to taking control of your finances. Most experts recommend that you have three-to-six months of living expenses set aside in an account earmarked for emergencies.
But that’s a big number. So start off small, says David Bach, co-founder of AE Wealth Management. Consistently save a small percentage of your paycheck by setting up automatic transfers, he says.
“When your paycheck gets deposited, move money automatically from your checking account into a separate money market account or a separate savings account that you won’t touch,” he tells CNBC Make It. “You literally want to almost forget it’s there.”
Don’t miss: Only 47% of Americans have enough emergency savings—but most people aren’t worried
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