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Emergency Savings and Financial Security: Insights from the Making Ends Meet Survey and Consumer Credit Panel

This report examines how consumers’ financial profiles vary by levels of emergency savings. We use a new version of the Making Ends Meet survey and pair it with credit bureau data from our Consumer Credit Panel to provide a unique picture of consumers' financial profiles not available through research outside the CFPB. These rich data reveal much about the current state of consumer finances in the wake of an especially turbulent period, triggered by the COVID-19 pandemic, in which Americans from all walks of life experienced unexpected changes, emergencies, dips in income, and expense shocks. Our analyses show striking differences in consumers’ credit and debt profiles, savings profiles, ability to meet financial obligations, and financial well-being by their level of emergency savings. While savings are a way for consumers to weather unexpected shocks, financial constraint resulting from obligatory expenses and insufficient income can impede consumers’ ability to save for emergencies. The findings highlight the degree to which consumers struggle across multiple dimensions of their financial lives and will serve as a valuable, original resource for other researchers, the policy community, and practitioners who study, advocate for, and serve struggling consumers.

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