Kerby Anderson

Many Americans say they are living on the edge of a financial disaster. Is that merely perception, or is it reality? Although government officials cite some positive trends in the economy, the reality in people’s lives is different.

This year, Bankrate asked the same question as last year. If you had an emergency expense of $1,000 or more, could you pay for it? Once again, a majority (56%) of US adults said that expense would be too great of a hit to their savings. Because they did not have savings to fall back on, a third (35%) said they would borrow the money or finance with a credit card or turn to friends or family.

Inflation is one reason for this financial dilemma in the lives of Americans. Two-thirds (63%) of US adults say inflation is causing them to save less for unexpected expenses, while nearly half (45%) say the same of rising interest rates.

Americans don’t keep much money in their bank accounts. The GOBankingRates survey found that nearly half of Americans have $500 or less in their savings account. About three in ten (29%) had between $501 and $5,000 in their saving account. And two in ten (21%) of Americans have $5,001 or more.

Social media is full of anecdotal stories illustrating how prices are rising faster. A TikTok video that went viral was a woman’s receipt from Taco Bell 12 years ago. The old receipt showed that, 12 years ago, Americans could buy two beefy five-layer burritos for $2.59 including taxes. Today that same burrito costs $3.69 for just one, and that doesn’t even include taxes.  Other stories show the rising cost of rent, car insurance, and utilities.

Government officials may say the economy is doing fine, but millions of Americans are living on the edge.