In this climate, who knows what lies ahead, so many Americans are choosing to play it safe.
To that end, nearly 2 in 3 Americans are limiting their monthly spending, according to a new report by Bankrate.com.
The majority of those polled cited the need to save more money as the reason behind a more cautious approach to spending, while one-quarter blamed stagnant income, followed by worries about the economy and having too much debt.
“Americans are finally limiting spending for a good purpose — to save money,” said Bankrate’s Chief Financial Analyst Greg McBride. “This is the first time in four years that the top reason wasn’t stagnant income.”
Although Americans are prioritizing saving more than in earlier years, a lack of emergency funds remains a critical issue for many, McBride said.
Indeed, most Americans have more credit card debt than emergency savings, according to Bankrate. McBride recommends having at least six months’ worth of expenses saved in an emergency fund. Just 28 percent of Americans have saved that much, a separate study said, and another 28 percent have no emergency savings at all.
When broken down by generation, millennials, followed by Gen X, were far more likely to limit their spending because of the need to save more, Bankrate said. Largely due to student debt burdens, older millennials — ages 26 to 35 — cited “too much debt” as the root cause more than other age groups.
Alternatively, Americans over 62, including retirees on a fixed budget, said they were limiting their spending primarily because of stagnant income, according to the poll of 1,000 adults conducted earlier this month.